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Why ISWALES being denied the vote Scotland had on tax? Former Secretary of State for Wales Lord Hain asks why the government has removed a requirement for a referendum to devolve income tax.

SOMETHING constitutionally unacceptable, even outrageous, is being foisted upon Wales.

The Tory Wales Bill removes a requirement in the Tory Wales 2014 Act for a referendum to devolve income tax.

In September 1997 I helped as a Welsh Office Minister to lead the Government's campaign to win the referendum to establish the Welsh Assembly.

There was only one question before voters: did they want an Assembly or not? There was no second question on whether they wanted income tax devolved as was specifically and importantly the case in the referendum on a Scottish Parliament.

Most devolutionists at the time took the view that to have such a second question in Wales would be to lose the referendum - and given how narrowly it was won - just 0.2% - how wise that turned out to be.

For years, leading politicians of all parties - including Conservatives - have been crystal clear: to devolve income tax powers to Wales would therefore need another referendum like Scotland had. Indeed just last year the 2015 Conservative Party general election manifesto committed to precisely that. The Wales Bill is therefore a flagrant and cynical breach of promise to the electorate.

The current Secretary of State for Wales, Alun Cairns, was a government whip and voted for the 2014 Act which put into statute the necessity for a referendum just two years ago.

So why has he, and why have the government, done a U-turn after such a short space of time? Is he frightened that, if invited to vote, a majority - maybe a large one - in Wales would turn down the powers? Could it be that he wishes to ram through income tax devolution without addressing irrefutable evidence that the Barnett formula has short-changed Wales in contrast to Scotland? Without a new "Barnett floor'' as First Minister Carwyn Jones has insisted, it would be pure folly for Wales to have income tax devolved.

Could it be that the Conservatives have an ideological objective to shrink the Whitehall state, offloading as much responsibility as possible onto individual citizens to fend for themselves, and sub-contracting tax revenues to devolved Legislatures? Having strenuously opposed political devolution in the past, the Tories now see the virtues of economic devolution in neoliberal terms, blocking the redistributive power of the UK state.

The incontrovertible advantage of modern Britain is its 20th century innovation: the pooling and sharing of risks and resources across the whole of the UK to ensure common welfare and decent standards of life for all citizens, regardless of nationality or where you live.

These range from common UKwide old age pensions, common UK social insurance (sick pay, health insurance, unemployment insurance and labour exchanges), common UK child and family benefits, a common UK minimum wage, tax credits and a UK system of equalising resources.

This means that everyone irrespective of where they live has the same political, social and economic rights, and not simply equal civil and political rights.

Pooling and sharing the UK's resources also enables redistribution from richer to poorer parts of the UK - like the coalfield communities of the South Wales Valleys. With around 40% of UK GDP concentrated in London and the south east of England, why on earth would Wales choose to cut itself off from that? I have seen no answer to the case for maintaining the integrity of the UK: redistributing resources from its better to less well-off parts, and guaranteeing equal opportunity and security for all UK citizens regardless of nationality, race, geography, gender, sexuality, age, disability or faith.

That is why it is right that all UK taxpayers - English, Welsh, Scottish and Northern Irish citizens together - contribute their taxes at a UK level to fund these common rights and services, thereby guaranteeing that the UK government and where relevant the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly have the capacity to deliver them.

And with England constituting 84% of the UK population and 87% of UK GDP, it would be mad for Wales to cut itself off from that, just as it would be mad for say the north east of England, with its similar GDP per head and demographic, to cut its income off from the rest of England, especially the south east.

This is especially serious for Wales which has a huge net fiscal deficit, involving a massive subsidy from the UK Treasury, estimated at PS14.7bn in 2014-15 - a figure similar to the entire Welsh Government bloc grant.

I have been a consistent devolutionist all my political life. As the author of the 2006 Government of Wales Act, I was proud to deliver the full law making powers the Welsh Assembly has enjoyed for some five years now, to the great benefit of Welsh citizens.

It is totally unacceptable to move the goalposts from a referendum vote in 1997 to deny Wales the chance to have a vote on income tax like the Scots did. Why should Welsh voters be treated as second class? In any case, we step at great peril down the road of income tax devolution, the destination for which would be impoverishment in less prosperous parts of the UK, Wales included.


Former Secretary of State for Wales Lord Hain
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Publication:Western Mail (Cardiff, Wales)
Geographic Code:4EUUK
Date:Oct 10, 2016
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