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Fiscal powers uncertainty 'not helping' the economy; CBI WALES WARNING ON DELAY IN SILK COMMISSION RESPONSE.

Byline: DAVID WILLIAMSON Political Editor

UNCERTAINTY about the future of fiscal powers for the Assembly is "not helping business," CBI Wales has warned as the UK Government announced a consultation on devolving stamp duty to the National Assembly.

Welsh Government Finance Minister Jane Hutt said stamp duty had already been studied "exhaustively" and it was now "impatient" for a full response to the Silk Commission report.

Plaid Cymru condemned yesterday's consultation announcement as an attempt to undermine the sweeping tax and borrowing recommendations from the Silk Commission.

Shadow Welsh Secretary and MP Owen Smith described the announcement as a "deeply dissatisfactory delaying tactic". The Federation of Small Businesses also criticised the "piecemeal" approach to devolution taken by the UK Government, but Chief Secretary to the Treasury Danny Alexander said borrowing powers to fund an improvement to the M4 could now be on the way.

The UK Government had been expected to respond this spring to the Silk Commission, which called for the Assembly to gain income tax-varying powers, subject to a referendum. Welsh Secretary David Jones denied that conflict had broken out within the Government about the future powers for the Assembly. He said: "No, it's not a coalition war. The fact is, devolving stamp duty land tax would have an effect not just in Wales, but across the rest of the UK."

The Clwyd West MP said that England and Wales - unlike Scotland - shared a highly populated border and changes to the tax could distort the economy.

Mr Jones said the consultation would be "very short" and said he was "not going to make any apologies".

He added: "Jane Hutt has got a responsibility to Wales alone. The British Government has got a responsibility to the United Kingdom as a whole, including Wales. I'm sorry if she's impatient, but given she waited for 13 years under the last government and there was no devolution of fiscal competence at all, I wouldn't have thought that a few more weeks would cause them too many problems."

Mr Jones ruled out the prospect of further consultations on taxes, saying: "What I would say is that all departments of Government have really got an agreed position on all elements of the Silk recommendations, the exception being [stamp duty] and we want to give it proper consideration. It's not a question of will, for example, another tax be the subject of further consultation.

"It's [stamp duty] that is the crucial one and it's important that we get it right."

The Lib Dem Chief Secretary to the Treasury Mr Alexander said: "Based on the outcome of this short and targeted consultation, the Government will make its response to the Commission's recommendations. "The Government will also set out how this can help, including through looking at the Welsh Government having early access to borrowing, to support a funding solution for the M4 improvement scheme in South Wales."

It is understood legislation to enact the Silk recommendations could be introduced this year.

CBI Wales director Emma Watkins yesterday welcomed the announcement and said "stamp duty could be used as a tool for growth, stimulating housebuilding and supporting home buyers".

But she added: "The lack of certainty and clarity on a deadline for Silk is not helping business - both those in Wales and those looking to invest.

"The CBI will continue to engage with all parties for a swift resolution, in the interests of driving forward the economy - and growth."

Janet Jones of the Federation of Small Businesses said: "We remain strongly of the opinion that greater financial accountability for the Welsh Government is essential if we are to promote a long-term focus on sustainable economic development in Wales.

"However, making announcements over taxation powers in a piecemeal fashion does not offer the clear and lasting devolution settlement that our members in Wales favour, and which has been backed by the Silk Commission and AMs from all the main parties."

Labour Welsh Government finance minister Jane Hutt said: "The recognition that the Welsh Government should have early access to borrowing powers for the M4 is welcome news.

"However we are impatient for a full response to Silk which was first due in the spring. As a result of our negotiations I fully expect any issues to be resolved in September which is crucial if we are to meet the timetable for draft legislation to be published in the autumn.

"The issue of stamp duty has been looked at exhaustively. The Holtham Commission, Silk Commission and Calman Commission have all recommended its devolution...

"We now expect the UK Government to deliver on Silk, for Wales. We believe rapid progress on this issue would provide a genuine 'win, win' for both the UK Government, Welsh Government and crucially the people of Wales."

Shadow Welsh Secretary Mr Smith said: "The Silk Commission's report was a considered piece of work and this deeply dissatisfactory delaying tactic goes to show the complacency and lack of urgency that has been the hallmark of the Wales Office under the Tories."

Plaid Treasury spokesman Jonathan Edwards said: "Plaid Cymru has long insisted that the transfer of jobcreation powers from Westminster to Wales is the best way of securing a Welsh economic recovery.

"The full implementation of the Silk Commission recommendations would go some way to achieving this, and so it is very disappointing to receive a statement which delivers no meaningful progress after an eight-month wait."

He added: "The Treasury wouldn't dream of treating Scotland like this, and it shows a complete lack of strength by the Labour Government that they have allowed the ConDems to bully them in this manner."

Welsh Liberal Democrat leader Kirsty Williams said: "I welcome today's announcement by the Chief Secretary to the Treasury to give the Welsh Government early access to borrowing powers for the improvement of the M4. Borrowing powers, like what we have been calling for in our response to Silk, will give the Welsh Government more scope to stimulate the economy.

"The consultation on stamp Duty Land Tax will be a way of gauging the opinion of businesses in Wales. The Welsh Liberal Democrats believe this tax should be devolved as it could encourage house building, boost the construction sector and create a stronger Welsh economy.

"I urge businesses that have a stake in this issue to respond positively to the UK Government's consultation. Wales must have a proper functioning parliament with additional fiscal responsibilities to create a stronger economy and a fairer society."

Eurfyl ap Gwilym, Plaid's member of the Silk Commission, said he was "somewhat surprised" the consultation had been launched.

He said: "We emphasised our recommendations were a well-considered and carefully balanced package of measures.

"There was give and take on the commission and then we came to what we agreed.

"I think it was very important it was a unanimous report... We're still, I think, of a view it needs to be taken as a whole."

> COMMENT: PAGE 20 | Director of CBI Wales Emma Watkins


Chief Secretary to the Treasury Danny Alexander has announced a consultation on devolving stamp duty to the National Assembly, which he says could help fund M4 improvements
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Publication:Western Mail (Cardiff, Wales)
Geographic Code:4EUUK
Date:Jul 18, 2013
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