This morning’s Western Mail reveals that a major report will be launched this week proposing a new funding deal for Wales, Scotland and Northern Ireland that would give the Welsh Government control of all income tax.
The report from the influential IPPR think tank also recommends that the Welsh Government would receive a share of VAT and gain control of a range of smaller taxes and alcohol and tobacco duties.
Report author Alan Trench has calculated that in 2010-11 this system would have transferred £9.7bn in tax to the Welsh Government. These funds would still need to be supplemented by a needs-based grant but he argues the new system would give much greater spending choices to the devolved governments.
He said: “It’s a model that’s designed to be durable, stable and work for all three devolved governments. They get significantly greater scope to do things that are different in substantive policy terms without being tied to the UK’s policies for England which is one of the things the Barnett formula does.”