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Draft Wales Bill

Volume 572: debated on Wednesday 18 December 2013

On 18 November, the Government announced their response to the Silk commission’s part 1 recommendations on fiscal devolution to Wales.

I am pleased today to publish the draft Wales Bill for pre-legislative scrutiny. The Bill implements almost all of the recommendations from the Silk commission’s first report on the devolution of tax and borrowing powers to the National Assembly for Wales and the Welsh Government.

Specifically, it will enable the Assembly to legislate about devolved taxes—a Welsh tax on transactions involving interests in land (replacing stamp duty land tax in Wales) and a Welsh tax on disposals to landfill (replacing landfill tax in Wales); it establishes a mechanism by which the Assembly can trigger a referendum in Wales on the question of whether a part of income tax in Wales should be devolved; and, subject to a vote in favour in a referendum, the Bill will enable the Assembly to set a Welsh rate of income tax, in the same way as the Scottish rate of income tax is set in Scotland.

These changes will give Wales more fiscal autonomy, and will make the Assembly and the Welsh Government more accountable to people in Wales for raising the money they spend.

The draft Bill also grants the Welsh Government new powers to borrow for capital expenditure and extends the circumstances in which they can borrow in the short term to manage their budget. These powers will enable the Welsh Government to borrow to invest in renewing Wales’s infrastructure and support growth in the Welsh economy.

In addition, as I announced to the House in March, the draft Wales Bill sets out how we intend to implement important changes to elections to the National Assembly for Wales. The draft Bill extends Assembly terms permanently from four to five years, making it less likely that Assembly elections will coincide with Westminster parliamentary elections in future; it will remove the prohibition on candidates in Assembly elections standing in a constituency and on a regional list; and it will prohibit “double jobbing”, by preventing MPs from also being Assembly Members.

The draft Bill also makes minor changes to the Welsh devolution settlement that we have agreed with the Welsh Government. These include changing the name of the Welsh Assembly Government to the “Welsh Government”; providing for HM Treasury to set an aggregate borrowing limit for local housing authorities in Wales and for the Welsh Ministers to set limits for each local housing authority; and enabling the Law Commission to provide advice and information to Welsh Ministers on devolved matters.

Taken together, this is a significant package of reforms which provides the opportunity for devolved governance in Wales to be fairer, more accountable and more able to support economic growth in Wales.