Wales Bill — House of Commons, 2016-07-05
Topic: Macroeconomics
Albert Owen (Labour, Centre-left): It is a pleasure to serve under your chairmanship once again, Mr Gray. Many points that I was going to make have already been raised by other Labour Members, especially by my hon. Friend the Member for Llanelli (Nia Griffith). None the less, I wish to discuss the idea of a referendum on income tax that was raised by my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), who is no longer in his place. The hon. Member for Gower (Byron Davies) talked about the Conservative manifesto, but I am more concerned with the fact that, under the Wales Act 2014, it is clear that if there were to be a referendum on the devolution of powers to raise income tax, it would be held before the powers could be transferred to the Assembly I said on Second Reading that I am a devolutionist. I have long argued that major constitutional changes should be made by referendums, and I supported that in 1997 and 2011. However, in recent weeks I have been persuaded by some of the arguments on whether we should hold referendums on this specific issue and a range of others, including on having a go at the Government of the day. I make that point seriously, because I am not convinced that this is the major constitutional change that it once was. The Assembly already has tax-raising powers, but we do need some safeguards, which is why I will support amendment 11 I know that you will not allow me to digress too much, Mr Gray, but let me say that I used to support the single transferable vote for elections. In theory, it is great textbook stuff, but as someone who has campaigned regularly in the Republic of Ireland, I can say that the practical implication of that has put me off. I have also been put off referendums over the past few weeks. None the less, we do need to move forward on income tax, and amendment 11 is the right vehicle to help us do that. What it suggests is that both Houses of Parliament in London and the National Assembly for Wales in Cardiff Bay would make that decision. They would have a mature debate on income tax, in which we would look at the whole fiscal framework and the settlement that we have at present Like my hon. Friend the Member for Llanelli, I am worried that if we were to give the Assembly the power to raise income tax, this Government would say, "There you are. You now have the tools to do the job. Get on with it and start raising your own taxes", while they cut the block grant and other fiscal measures. Our Welsh constituencies would end up poorer, which worries me considerably It would be fair and right to have safeguards, and it is what the people of Wales want. This Chamber of elected Members and the second Chamber should look at the matter in greater detail along with the National Assembly for Wales. It is right to have that consensus and some safeguards to ensure that the people of Wales are not worse off as a consequence of the measure We all know that the Barnett formula has a flaw, and we all argued that in the 2015 election—it was in all our manifestos. I have concerns because for every pound that is spent in the UK, Wales gets £1.15 in return. It gets more than England, but not as much as Northern Ireland or Scotland. In the future, if these income tax measures were given to the Welsh Assembly by a Government who were keen to get rid of them without having that proper debate in both Houses of Parliament and the Welsh Assembly, I would worry that the people whom we are here to represent would be in a worse position. I understand the theory, but it is the practice that worries me, and for that reason, I will support amendment 11.