3. What steps he plans to take to implement the recommendations of the first report of the Commission on Devolution in Wales published in November 2012. (129635)

5. What steps he plans to take to implement the recommendations of the first report of the Commission on Devolution in Wales published in November 2012. (129637)

I welcome the publication of the commission’s first report. It is an important piece of work that is thorough and wide-ranging, and I am giving each of the 33 recommendations my full consideration in consultation with Treasury and other Cabinet colleagues. The Government will respond formally in due course.

I, too, congratulate Paul Silk and his team on the excellent work they have done and on the report they produced. Will the Secretary of State make a commitment to introduce legislation in this Parliament to carry forward some of the recommendations in the Silk report?

This matter has been referred to Her Majesty’s Treasury and is the subject of negotiations with the Welsh Government. I can confirm that the legislation will be looked at with a view to proceeding as expeditiously as possible.

The Silk Commission makes a compelling case on the devolution of partial income tax to the Assembly. How swiftly does the Secretary of State believe that we can proceed on this, given the apparent reluctance of the First Minister to countenance reform before full Barnett reform, despite a very good agreement that was brokered in October?

The First Minister’s position is a matter for him, but Paul Silk makes it clear that the commission recommended the devolution of income tax-varying powers within different bands, subject to agreement between the Welsh and the British Governments on issues such as funding. That matter must continue to be looked at.

Does the Secretary of State agree that those who argue that Wales does not have the tax base to partially devolve income tax are fiscally illiterate?

I do not know whether I would go that far, but clearly there is an argument to be made, and it is under consideration.

Does the Secretary of State agree that if the Assembly is given, and uses, powers to raise unlimited amounts of income tax, the effects on the Welsh economy could be devastating?

I think it unlikely that the Assembly could raise unlimited amounts of tax, because it would need unlimited levels of income, which everyone would agree it does not have. Paul Silk’s work is important, and it deserves careful consideration, and that is what is happening at the moment.

May I first add my words of sympathy and best wishes to those who have been affected by the floods in Wales, and my thanks to the emergency services and volunteers, and to the Secretary of State for going there tomorrow?

As the Secretary of State will know, the Silk commission’s report is a very important document that has produced recommendations relating to air passenger duty and income tax—issues that affect not just Wales, but the whole of the UK. Does he therefore agree that the whole House ought to be able to debate those issues, and can he explain why he seems to want to limit that debate to the Welsh Grand Committee?

I believe that we should have an early debate in the Welsh Grand Committee on this important issue. The hon. Gentleman will know that my office is in touch with his office and the offices of the leaders of other parties with a view to agreeing that. It should be done as quickly as possible. On the question of a further debate, that is clearly a matter for the Treasury, the Wales Office and the Welsh Assembly Government to progress the work that is being done to discuss the issue, and at that stage we should consider a further debate, which could potentially be on the Floor of the House. Certainly, any legislation would require primary legislation, which would have to be a matter for the House to deal with in the usual way.

I think the Secretary of State said he is in favour of a debate on the Floor of the House, which is welcome, as his predecessor committed to holding such a debate when we last discussed the Silk commission. In anticipation of that debate and outside the Silk commission, so to speak, the right hon. Gentleman will know that borrowing powers are extremely important to the Welsh Government. Can he confirm that the Silk commission’s recommendation that £200 million-worth of non-income tax powers would constitute, in his view, an independent income stream that would facilitate borrowing for the Welsh Government?

That matter is under active consideration between the Welsh Government, the Wales Office and the Treasury. The hon. Gentleman will have seen the announcement that was made at the end of October and will have been able to draw his own conclusions.