Tuesday, December 20, 2016

New Financial Arrangements for Wales.

Yesterday, the Secretary of State for Wales published a written statement 'Welsh Government Fiscal Framework'. It is a very big deal for Wales. After 30 yrs of squabbling about the supposed unfairness of the Barnett Formula as the mechanism by which the Treasury calculated a 'block grant' to fund public services in Wales, the Welsh and UK Governments have agreed a new 'fiscal framework'. I feel I've lost an old friend. No more debates about the Barnett Formula. What are we Welsh going to argue about in future Welsh Grands!! Have to find new issues to argue about. Welsh jurisdiction perhaps. I do hope not.

Together with the Wales Bill, we are putting in place much changed governance and financial arrangements. Stamp Duty land tax, Landfill Tax and Welsh rates of Income Tax will become responsibility of Welsh Govt. We're told the new fiscal arrangements will take into account Wales long term tax capacity, and future population changes. I particularly like the mature relationship between the UK and Welsh Govts we've seen in resolving what has been a long term grievance. There will be much work needed to bring these taxation changes in for 2019. Agreeing the principles is important, but so is putting in place the working arrangements to deliver the changes.

Big changes in Welsh Govt overall borrowing powers as well. Up from £500,000,000 to
£1,000,000,000. And the annual limit on borrowing increased to £150,000,000. Daresay there'll still be some nitpicking over details of the Wales Bill, currently at Report Stage in the House of Lords, but I sense it will now go through to the Statute Book.

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