UK Government is being “reckless” with constitution – Owen Smith

Pontypridd MP Owen Smith has today accused the UK Government of being reckless with the constitution by proposing that income tax powers be devolved to Wales without sufficient analysis of the risks of tax competition between parts of the UK.

Speaking as MPs debated the Silk Commission on Devolution in the House of Commons, Mr Smith questioned whether sufficient analysis had been undertaken of the impact of income tax devolution either side of the densely-populated Welsh border.

He suggested that the Secretary of State’s sudden conversion to the cause of Welsh devolution was due not to concern about Wales or the union, but to allow the Conservative Party to propose further tax cuts for the richest in society.
Commenting, Owen Smith said:

“Today we’ve heard once again from the Secretary of State that he wants lower taxes in Wales, but with no explanation of how he would fund such a tax cut or the impact on essential Welsh public services. David Jones remains at odds with his colleagues in the Treasury and his Assembly Group leader in Wales about the powers proposed in the Draft Wales Bill and the impact of tax competition across the UK, but it is clear that what unites them is a desire to cut taxes for the richest in society.

“Labour campaigned for devolution and delivered it for Wales and Scotland, and we support additional powers where they will help grow the Welsh economy, such as borrowing powers to invest in infrastructure. But we will not risk undermining the solidarity of the union with other parts of the UK, nor the ability to redistribute between richer and poorer areas. It is only the nationalists with their desire to break up the UK, and the Tories who want to undermine public services, that would proceed to major new powers without a full analysis and very careful consideration.”

Speaking earlier in the Welsh Grand Committee, the Pontypridd MP expressed concern about the prospect of tax competition between parts of the UK. He said:

“I believe the Secretary of State himself and his colleagues in the National Assembly are already undermining that Union with the ill-judged and ultimately false promises of lower taxes in Wales under a Conservative administration.

“Disaggregation of our common tax base and competition as the Welsh Secretary has recklessly recommended would only damage Wales in the long run and fundamentally undermine the union that is the best means by which we pool risk and share rewards between all the people and regions of our state.”