Powers for Wales in biggest devolution in decades

6 Nov 2013 01:45 PM

UK Government clears the way for M4 improvements and new homes.

Wales will get new financial powers to take control of its own economic destiny as the UK government agrees to key recommendations for devolution from the Silk Commission.

The Prime Minister and Deputy Prime Minister announced key parts of the deal at the Welsh Assembly following a meeting with Carwyn Jones.

During a visit to Owens Logistics, the Prime Minister announced that the M4 is to be upgraded around Cardiff. Thanks to the agreement reached, the UK government will clear the way for the Welsh government to borrow money to enable much needed improvements to take place.

The Deputy Prime Minister visited Glan Llyn housing development in Newport to announce a radical shift of power so that Wales will have control over its stamp duty, bringing in money that can be spent on priorities like much-needed affordable homes for families.

Prime Minister David Cameron said:

As our economy turns a corner, we must make sure that people in Wales share in the rewards. Wales needs more businesses creating jobs, a decent road network to make it easier compete in the tough global race and lower taxes so hardworking people have more money in their pocket at the end of the week.

That’s why we’re cutting tax for over 1.1million people in Wales making the average taxpayer £700 better off. Its why we are ensuring that plans to upgrade the M4 around Cardiff can go ahead, easing congestion and creating jobs. And it’s why we are setting out plans to give the Welsh government more powers to make the most of the talents of its people and businesses and deliver the growth Wales needs.

Deputy Prime Minister Nick Clegg said:

This is a huge moment for Wales - the next milestone in Welsh devolution and the next step forward in Britain’s economic recovery. I’ve always believed that the only way to let different parts of the UK make progress in their own way is to truly devolve powers.

Central government is putting its money where its mouth is. Today’s unprecedented transfer of powers to Wales means much greater freedom over the money raised here. Very simply, Westminster is letting go so that Welsh people can benefit from a boost in jobs, transport, homes and, potentially, cut people’s income tax bills too.

Our economic recovery must be shared and it must have Wales at it’s heart. But that means putting the Welsh people firmly in the driving seat - and that’s what today is all about.

Arrangements are to be put in place to enable the Welsh government to fund upgrades to the key routes on the trans-European road network - the M4 in South Wales and the A55 in North Wales.

It will do so by a combination of extending existing borrowing powers and by devolving other tax and borrowing powers recommended in the Silk Commission’s first report.

Use of the existing borrowing powers will enable badly-needed improvements to the M4 to get underway as soon as possible.

The Wales Office statement published today confirms that:

  • Welsh ministers are to be given borrowing powers, so that they can borrow money to invest in Wales
  • Landfill Tax and Stamp Duty Land Tax in Wales will be devolved, as the Silk Commission recommended, ensuring the Welsh Government has an independent funding stream to pay back the money it borrows
  • a referendum will take place so that the people of Wales can decide whether some of their income tax should be devolved to the Welsh Government, in the same way as it is in Scotland

Secretary of State for Wales David Jones said:

The announcement today demonstrates the UK government’s commitment to giving the Welsh government the tools it needs to renew Wales’s infrastructure, so that we can continue to build economic recovery and help to get the Welsh economy moving faster. In the short term, we are ensuring that the M4 improvements can go ahead as soon as possible.

These measures will also make the Assembly and the Welsh government more accountable to the people of Wales who elect them. Since devolution those institutions have been accountable only for how they spend taxpayers’ money. They will now become more accountable for how they raise it.

Chief Secretary to the Treasury Danny Alexander said:

I have strongly supported the recommendations made in the Silk Commission’s first report and so am delighted that my work with Jane Hutt, the Welsh government Finance Minister, has enabled us to deliver this excellent outcome for Wales. For the first time ever a Welsh government will have the power to borrow and spend money on projects of its choice, and also the ability to pay for it all using new revenue raising powers. For Wales this is an important step forward on the devolution journey and will bring real benefits.

Notes to editors

  1. A full response to all 33 recommendations of the Commission on Devolution in Wales (the Silk Commission) will be published later this year.
  2. A copy of the Written Ministerial Statement can be found here
  3. Investment from the UK government in Wales includes: Wales will benefit directly and indirectly from almost £2 billion investment to modernise the rail network, including electrifying the mainline to Swansea and the railways serving the South Wales Valleys; £250 million to build a new prison in North Wales; and £57 million to bring superfast broadband to Wales.