Welsh Tory tax cut call

Following my earlier update, Opposition leader Andrew RT Davies insists there are 'no issues' within the Welsh Conservative group about his tax cut call. Details of the full story are here.

North Wales AM Antoinette Sandbach says her tweet this morning was about EU agriculture policy and not a dig at her boss. However she still clearly has questions as she told her followers that 'I support tax cut proposals, but want to see these targetted at the squeezed middle.'

Mr Davies told me that, as far as he's concerned, 'everyone in the group is content' with all the ideas he raised in his lecture last night. But he also said that dissent is welcome in the Conservative Assembly group, and criticised other parties for 'Cuban' efforts to stifle their members.

There are clearly mixed views within the Welsh Conservative group about their leader's call to reduce the 40% rate of tax if the Welsh Government gets power over income tax. You can read details of the proposals here. In response North Wales AM Antoinette Sandbach said on twitter:

Despite her publicly questioning Andrew RT Davies' proposals, sources close to the leadership were relaxed about her comments and one Conservative AM told me they welcomed new ideas being put forward.

But another was less happy about the proposal not being discussed by AMs, saying that it would be down to the group to work out what to cut to pay for a tax reduction and fearing they're laid open to accusations of cutting tax for the rich.

Opposition leader Andrew RT Davies has been defending his call for the 40% tax rate to be cut if a future Welsh Government were to have power over income tax. He's due to set out his proposal in a speech tonight and has been telling Political Editor Adrian Masters more.

Plaid Cymru has condemned a Welsh Conservative call for a cut to the 40% tax rate as 'irresponsible' and 'out of touch.' Plaid's leader Leanne Wood says,

Labour's Shadow Welsh Secretary Owen Smith has criticised a call to reduce the 40% tax rate here in Wales made by the opposition leader Andrew RT Davies.

What Andrew RT Davies has to say about taxes in his speech later is significant even though it's speculative and acknowledged by Welsh Conservative insiders to be as much about political positioning as it is about economics.

They expect opponents to paint them as elitist for saying they'd focus cuts on higher rate tax payers. But Tories point out that people start paying that 40% at just £34,000 and that their coalition colleagues in Westminster are already making moves to ensure the lowest earners pay less or no tax.

Conservatives are unlikely to be in a Welsh Government in the near future and income tax power isn't going to be devolved soon. But, as one insider puts it, this is a 'clear blue water' statement, showing the Welsh Tories' centre-right thinking and sharpening debate about what devolution is for.

The Assembly Opposition Leader is expected to say that he'd cut the 40% income tax rate if he were part of a future Welsh Government with tax-varying power. In a speech later, Andrew RT Davies is to say that cutting the rate for people who earn over £34,000 a year, would encourage business growth.

Welsh Conservatives say such a move would benefit 89,000 people who earn more than £34,000 a year and would cost between £12m-£16m. And they say it would complement UK Government efforts to make sure the lowest earners pay less or no tax.

The Welsh Liberal Democrats have previously said they'd cut the basic rate by 2p. But any change would be a long time coming. Although the Silk Commission into further devolution recommends that part of income tax should be devolved, it says that should only happen if voters agree in a referendum.