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Opinion

Wales needs control of taxes so that we can forge our own economic future

15 Dec 2017 3 minute read
Steffan Lewis AM. Picture by National Assembly (CC BY 2.0)

Steffan Lewis, Plaid Cymru AM for South Wales East

The government has published the first ever rates for the Land Transactions Tax, the replacement for Stamp Duty which is the tax on buying homes.

I am reliably informed that these are first distinct taxes to be levied by a Welsh administration since the Statute of Rhuddlan. And they are totally different to the rates that have been proposed for England.

This is a fundamental change, with Welsh people having no living memory of paying different national taxes to England.

Wales, England and Scotland are increasingly moving in different directions when it comes to public finance.

While the march of Brexit suggests a Westminster power-grab (and this prospect is completely real), the flow of powers before the EU referendum was in the other direction, albeit at a very slow pace.

As a Welsh nationalist, I welcome this policy divergence from England.

For once, we can imagine people living here to be Welsh taxpayers and Welsh citizens, and paying different taxes to our neighbours is an important step in deepening that relationship.

Independence

Plaid Cymru has long advocated that Wales should set distinct and better tax policies than England.

For what it’s worth, my analysis is that the proposed rates by the government are more suited to the Welsh housing market than the equivalent rates that are being endorsed at Westminster.

I believe there is scope for more action on second homes, but Labour and the Conservatives have usually been reluctant to agree, so this may have to wait for a Plaid Cymru government.

However, my challenge to the Labour Government is that if decisions on Stamp Duty are better made in Wales, then why not other economic decisions as well?

Independence is the only way to have a truly complete set of economic and fiscal levers in Wales.

But tax devolution is already happening, and is a normal development. Countries whose governments want independence, namely Scotland, Catalonia and Flanders, already have substantial tax devolution and have used that devolution to shape their own economies, ahead of independence being attained.

There is no particular contradiction between the two, and the point is that a looser and less powerful British state means a stronger, more confident Wales.

So if the Labour Government accepts that taxes on property should be made in Wales, why not Corporation Tax too? Why not VAT?

Why not keep even more of the £18bn we generate here in Wales? Do they honestly think the Tories could do a better job?

My position is clear. Tax policy should be set, controlled and decided for Wales, by Wales, as a matter of principle, no matter who is in power.

Our national story is one of small steps, because the unionist parties have for so long conspired to stop us from taking giant leaps.

But Plaid Cymru can and will grasp these new opportunities to forge a future for the nation which is decided by ourselves, not dictated to us from London.


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14 Comments
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Red Dragon Jim
Red Dragon Jim
6 years ago

Fantastic article and wish Steffan Lewis all the best with his recovery.

j. humphreys.
j. humphreys.
6 years ago

With the current tax wars going on everywhere, this is a chance to move forward.
Business on board, with temptation? Good stuff,

Graham John Hathaway
Graham John Hathaway
6 years ago

The issues of tax and spent lie at the heart of any Government and just how it plays out in terms of polices and competence, What a delight to witness a piece of tax history in the life of Wales if only a marginal amount of discretion. Sufficient for Steffan to see potential for making a difference to our lives, but fully taken advantage of, albeit slowly. It raises the tantalising prospects of further devolution of fiscal matters but I feel these will be highly protected by Westminster. That is the irony of the drip feed of powers. It’s always… Read more »

Muddy Valley
Muddy Valley
6 years ago

Hi Graham, the idea that we are owed some sort of repayment for the export of wealth both excites and intrigues me. How much is the amount and from whom would the repayment be made? Would it need to be shared with other geographical areas exploited in, arguably, the same way such as Lancashire and Yorkshire? Would the benefits be targeted to the industrial areas of the south from where mostly the industrial wealth was extracted or shared across the whole nation? A wonderful pandora’s box of speculation to explore!

Graham John Hathaway
Graham John Hathaway
6 years ago
Reply to  Muddy Valley

Hello Muddy Valley, without a long saga of mis management of the renewal of old industrial areas of the likes you have mentioned, and others, simply put we are owed. It seems this is, to be fair, a symptom of decline that other countries face just to mention the old industrial rust belts of the USA. An indisputable fact is the characteristic of neglect that remains and the dire consequences of life in decline. Political, economic and social. Always affecting the more vulnerable in society. The differences will split when the areas you mention are not seeking independence, not in… Read more »

Edeyrn
Edeyrn
6 years ago
Reply to  Muddy Valley

You are right Muddy valley…..Wales is suffering the legacy of being a colonised mess…..where its men and women of prominence and status refused to speak out or up for the very communities exploited

credyd
6 years ago

While we remain locked into a dysfunctional and destructive monetary system based on a Ponzi scheme of ever mounting IOU’s (digital “Sterling pounds” representing 97.2% of our entire money supply), considerations of tax alterations mount to little more than moving the deck chairs on the Titanic. That is no exaggeration. Given that exponentially growing debt levels now far exceed the the amount of pounds, euros and dollars even in existence, a Black Hole of global economic destruction is on its way. Consider the 2007-8 financial glitch just a signpost pointing to the approaching Debt Tsunami. Fiddling with taxes in Wales… Read more »

Graham John Hathaway
Graham John Hathaway
6 years ago
Reply to  credyd

At last at least a glimpse of the reality of the square mile and the root causes of the 2008 banking crash. I thought it most revealing, thank you . It was a banking failure of casino style behaviour and the efforts to curb this but aided by a lack of controls that was international. Are we not still floundering. It looks like. If you seek to grab a tiger by its tail it’s often the case you will get bitten. In fairness to Plaid Cymru, and Adam Price, has he not flagged up and urged the setting up of… Read more »

Geoff Horton-Jones
Geoff Horton-Jones
6 years ago

Totally agree
Am not happy with taxes being set and then reset to zero as per Business Rates. Scottish income tax levels as set appear to offer a very wide range of options for both the people and their Government
We desperately need to pay our own taxes into the Welsh Government and to have the vehicles to invest in our own future.

Dafis
Dafis
6 years ago

Get well soon Steffan, and then we’ll go into the detail of what is needed. For any separate tax regime to mean anything we need to be entirely separated from the Whitehall/Westminster government.

Josh
Josh
6 years ago
Reply to  Dafis

A separate tax regime implies a separate spending regime. To cover expenditure Wales would need higher taxes than England (or reduced expenditure). So, yes, details needed.

Edeyrn
Edeyrn
6 years ago
Reply to  Josh

Wales spends a lot on things it doesnt need, but England asks for …… high speed rail is one among many other vast costs

Graham John Hathaway
Graham John Hathaway
6 years ago
Reply to  Edeyrn

An interesting reflection on a central politico, as referenced by Westminster, where there has been political-economic and cultural ties within a Union, suggests the basis of mutual benefits. It cannot be equal or demonstrated that it is anywhere near to a consensus of behaviours, relationships and outcomes. Just look at each category of economics, cultural and social influences. Did Wales vote for costly wars, for spend on arms of destruction, Trident, or HS2, or has any serious influence on the way Brexit will unfold. And how much has all this costed Wales and what percentage of our receipts intoTreasury coffers… Read more »

Jonathan Edwards Sir Benfro
Jonathan Edwards Sir Benfro
6 years ago

Typical of the leading members of Plaid. Nearly get to where we need to be. But still falls short. “Plaid Cymru can and will grasp these new opportunities to forge a future for the nation” What opportunities? I know that the powers are on the books. But where are the moves actually to use them? Plaid’s job is to create these opportunities, because they have no real existence when neither Labour not the Conservatives are making any significant moves. Plaid has to make things happen. Plaid has to break up the status quo. One way to do this is to… Read more »

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