4. If he will publish an impact assessment of the effect of the draft Wales Bill on cross-border areas. (901766)

The Government published a summary impact assessment with the draft Wales Bill, which examines the effects of the Bill’s provisions on cross-border areas. We intend to introduce the Bill in the fourth Session, subject to agreement of the fourth Session programme, and a full impact assessment will accompany the Bill on introduction.

I thank the Secretary of State for that answer, but the draft Bill provides for a lock-step approach to varying income tax bands, against the wishes of all political parties in the Assembly and against the advice of the Silk commission. The reason given is concern about overall progressivity in the UK tax system. Will the Secretary of State elaborate on what he means by progressivity and say why he is adopting that approach?

As the Government have made clear, they believe that the progressivity of the UK tax system should remain at Westminster. That is why those provisions have been inserted in the draft Bill.

15. One damaging consequence of devolution has been the abandonment of investment in cross-border road improvement in mid-Wales because the Department for Transport—quite reasonably—sees no economic benefit to England in improving access to mid-Wales. In the response to the Silk commission report, will my right hon. Friend rectify that damaging consequence of devolution for mid-Wales? (901777)

My hon. Friend is quite right, and cross-border road routes are one unfortunate consequence of devolution, in that no overarching arrangement is in place. I have specifically asked the Silk commission to consider that issue, and I hope that it will address it in its report.

I am sure that the Secretary of State will agree that certainty on taxation policy is key to boosting economic confidence in Wales. Although he has told us of his vision to use the Wales Bill for a 1p cut to all income tax bands in Wales, the leader of the Conservative party in Wales has said that he would cut only the top band of tax. Will the Secretary of State clear up that complete muddle about his Government’s position on taxation in Wales?

We have made it absolutely clear that we believe a competitive Welsh economy would depend to a large extent on a competitive rate of tax. However, I must remind the hon. Lady that devolution of income tax is a matter for the Welsh Government, in that it would be the Welsh Government who would have to put forward a referendum to the Welsh Assembly.