Wales Bill — House of Commons, 2016-07-05
Topic: Macroeconomics
James Michael Davies (Conservative, Centre-right): With regret, I stand to oppose clause 16, which relates to the removal of the requirement for a referendum on the devolution of income tax or a proportion of it to the Welsh Assembly. I want to give my reasons for that. In Scotland there was a referendum before such a change took place. Also, the manifesto on which I stood for election—both the UK version and the Welsh version—reiterated the requirement for a referendum. When I and other members of the Select Committee on Welsh Affairs scrutinised the draft Wales Bill, it contained no such proposals. We must ask ourselves why at this stage we want to remove the requirement to have a referendum. In other words, why do we want to repeal this requirement that is in the Wales Act 2014? It is clear that the Welsh people would not vote in favour of the devolution of income tax, so this is an attempt to circumvent the will of the people, in my eyes Why do we wish to devolve income tax? Financial accountability has been talked about, but I believe that unless and until the Welsh Assembly Government levy the vast majority of taxes, they will continue to blame this place for not being in a position to provide them with limitless funding. Of course, any situation whereby they would levy most taxes would equate more or less to Welsh independence, which I feel the Welsh population do not favour If these powers are transferred, what will happen to the level of taxes? We are told by some that the powers would not be used, and if that is true then why would we wish to transfer them to Cardiff? Some, of course, fear that tax levels would be increased and, clearly, from my point of view, that would harm the Welsh economy. Some have suggested that tax could actually be reduced. That is highly unlikely, but if it ever occurred it would undoubtedly lead to calls from some nearby English regions for similar reductions. Any competitive advantages would be eliminated From a north Wales perspective, there are 50,000 cross-border commutes every day and 1 million people of working age live on either side of the border. This is a political border that does not reflect how people live their lives or how businesses operate, and there is already cross-border disparity in the standard of public services, which leads to much frustration. Why would we want to make the situation worse? I believe that differential tax rates could lead to confusion, further complication of an already complex tax system, additional associated costs, and consequences, intended or otherwise, for where people choose to live and work, whether that is in England or Wales We have just undergone the latest Assembly elections and, as in the past, disinterest and disengagement were evident, with votes cast primarily on the basis of politics in this place and with reference to the EU referendum, and I am afraid that sums up the level of enthusiasm for more Welsh devolution, at least in my area. It is clear that there is no call or mandate for additional powers and particularly not for tax-raising powers, and I see this as simply yet another step in the gradual break-up of the UK, which my residents do not want. Indeed, now that the prospect of partial income tax devolution has been raised, we are already seeing calls for further tax devolution. I feel strongly that this is an unnecessary and undesirable proposal and, with great regret, I will have no choice but to vote against the clause.