Tax and Borrowing Powers on the Horizon for Wales

October 25, 2012 Taxation in UK

Welsh FlagLONDON – The devolution of financial powers to Wales from the UK has taken a leap forward, with the governments of both countries confirming their intentions on the issue.

In a joint statement released on October 24th the UK Government and the Welsh Government announced that both parties have established a common position on the devolution of capital borrowing powers from the UK to Wales, on the condition that Wales is able to establish an independent revenue stream.

The issue of establishing a source of revenue for Wales is currently being investigated by the independent Commission on Devolution in Wales, commonly referred to as the Silk Commission, which is currently conducting a review on the fiscal and economic ramifications of granting tax setting responsibilities to the government of Wales.

The Commission is due to present its first report on the potential devolution of tax powers by the end of the year.

Commenting on the economic and national significance of tax setting and capital borrowing powers in Wales, the Chief Secretary to the HM Treasury Danny Alexander said: “…this is an important step forward on the devolution journey for Welsh people, and will bring them significant benefits. I am delighted that the two Governments have worked closely together to deliver this good outcome for Wales.”

The Secretary of State for Wales David Jones also commented on the capital borrowing powers and the potential for tax setting powers, saying, “…the commitments made today establish a strong basis from which to work with the Welsh Government after the Silk Commission reports to me next month.”

Photo by pmecologic