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New financial powers for Wales

The Prime Minister confirms further devolution for Wales, including borrowing powers & referendum on income tax.

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Legal hitch delays decision on one tax

There was no mention from David Cameron and Nick Clegg of one of the taxes that the Welsh Government was expecting. That's because Aggregates Levy -a tax on taking material out of the ground- could be challenged in the European Court.

The European Commission is investigating whether the exemptions to the levy, such as for coal mining, breach the European Union's rules on state aid to industry. The UK Government has decided that it cannot be devolved until that legal dispute is settled.

The Welsh Government knows that it will definitely not be getting one tax that it wanted -long haul Air Passenger Duty. So hopes of attracting transatlantic flights to Cardiff Airport by offering them a tax cut have been dashed. The taxes that will be transferred are:

  • Stamp Duty on property sales, currently worth £115 million a year
  • Landfill Tax, currently worth £60 million a year
  • Some income tax but only after a referendum. The First Minister says he will not even consider holding it until Wales gets a better deal on its funding from Westminster.

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