Tax and Spend

Wales’s government is to be held to account for its expenditure, according to an announcement this week by Cheryl Gillan the Secretary of State for Wales. “It is only right that the Welsh Government is accountable for the money it

spends.”

The Westminster coalition government in the autumn will set up an independent Commission to look at the financial accountability of the Welsh Government and National Assembly for Wales.

It clearly is a cause of concern to the Prime Minister and his team that Wales can set its own priorities on expenditure but takes no responsibility for raising the cash. He hinted at this when he addressed the National Assembly recently.

It is understood that George Osborne and his Treasury team are more sympathetic to the Holtham Commission’s recommendations than was Gordon Brown’s Labour government. Carwyn Jones is known to be cool on powers to vary income tax and is not greatly enamored with the other powers that Holtham proposed.

In announcing the new Commission Mrs. Gillian made it clear that in examining the issues of fiscal devolution and accountability in Wales the work of Gerry Holtham’s Commission would form the bedrock of the study.  

In her announcement she said, “The Government is committed to considering all aspects of the Holtham Commission’s reports.  Separate discussions will continue on Holtham’s proposals for funding reform for Wales.”

So the discussions on fair funding and the reform of the Barnet formula are to be held separate from the main work of the Commission, which is on tax and other fiscal matters.

 The hope is that the report and its recommendations will be complete by the autumn of 2012. Then the Government will consider any proposals, and they will then take the opportunity to look and take stock on the constitutional settlement in Wales in light of experience.

It is thought that it is at this point that Westminster will look at implementing any measures out of the Commissions and also make the final decision on the voting system for the National Assembly. If any legislation is required it is likely to be placed before Parliament in 2013.