The Silk Review

During autumn 2011 the Secretary of State for Wales Cheryl Gillan announced a new Commission on Devolution in Wales.

This will look at the case for devolving fiscal powers and will review the powers of the National Assembly for Wales in general, recommending modifications to improve the present constitutional arrangements.

The Commission will aim to report on fiscal powers in autumn 2012 and on constitutional matters during 2013. It will be led by Paul Silk, former Clerk to the National Assembly for Wales.

The possible fiscal powers to be devolved

A limited power [1] to vary income tax rates. Income Tax raises £4.5bn in Wales compared with £140bn for the UK as a whole, i.e. 3.2 per cent.
That Corporation Tax could be fully devolved to Wales (and to the other devolved administrations). Wales raises £900m in CT compared with £30.2bn for the UK, i.e. about 3 per cent.
Stamp Duty Land Tax should be fully devolved to Wales if a fair offset to the block grant can be agreed. SDLT raises £100m in Wales compared with £4.9bn for the UK, i.e. 2 per cent.
Capital Gains Tax on property (i.e., land and buildings) should be '...explored with HMRC...' to see if administrative costs would be prohibitive. If administrative costs are not prohibitive then CGT on property should be fully devolved provided a fair offset to the block grant can be agreed. No details of CGT raised in Wales are available.
Council tax should be devolved.
Some variations to minor taxes may be allowed, e.g. air passenger duty, landfill tax and the aggregates levy.
The CLA tax committee will be scrutinising each stage of the review to ensure members' interests are represented.

Contact

Ben Underwood
Regional Director - Wales

T: 01547 317085
F: 01544 260023
ben.underwood@cla.org.uk

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