Guest blog by Matthew - one of my parliamentary team.
The National Assembly for Wales is unusual, if not unique, in having legislative and spending powers but not tax and borrowing powers. It is, in Parliamentary terms, an adolescent child with the ability to choose what it does and how much of its parents' money it gets to spend. Yet without the ability to earn money, or keep account of how much it borrows, from its generous but perhaps by now somewhat beleaguered guardians.
Lord Hain claims that a referendum is about democracy. He claims that the Conservative Manifesto had a requirement that a referendum would be held before income tax was devolved. Lord Hain, fails to recognise that the Conservatives are not the majority Party in Wales, nor did they win the majority of seats in Wales in 2015. The Party who did, Labour, want the devolution of income tax without a referendum, as does The Conservative Party who suggested the idea in the first place.
Lord Hain and others who fear devolution will highlight that Scotland had a referendum on the devolution of income Tax. That vote occurred on the same day as the Scottish devolution referendum in 1997. The powers granted by that part of that referendum, were never used. There have been a number of subsequent fundamental changes to the system of Scottish Taxation, which reach far beyond that ever envisaged in part b of the 1997 poll. The further fiscal devolution that has followed from the Smith Commission proposals did not need an affirmative vote in a referendum. In fact in Wales, a number of economic leavers like land fill tax and Stamp Duty have already been devolved. These required no referendum.
It is recognised that although it is a detestable phrase, Wales is not Scotland so what is right for Scotland, is not always right for Wales. In this instance, I must agree. To make Wales have a referendum on the devolution of income tax is not the right step forward. Why must Wales be left behind?
It is important to focus on the democratic mechanism that is the referendum and the state of democracy in Wales. Following this year’s referendum on EU membership, are we not referendum’d out. Now we have ‘taken back control’, can our elected representatives have a say in something? We are still experiencing the fallout of this year’s referendum, it is likely that the public will not react well to another. It will likely just expose further divisions. With regard to voter turnout in Wales, the previous referendum on Welsh devolution in 2011 produced a somewhat disappointing turnout of 35.6%. The Silk Commission in their report on fiscal devolution stated that the turnout in a referendum on a technical tax issue could be so small as to make the outcome both risible and contestable.
‘What do we want?’ The devolution of the right to vary the Welsh rate of income tax.
‘When do we want it?’ About 17 and a half years ago please.
Hardly the catchiest slogan.
A referendum of this kind would be seen as the worst kind of technocratic exercise, and if it were to lose what would happen then? Richard Wyn Jones asked last year, ‘What if people vote NO to accountability? Where does that leave us?’ If the people of Wales choose to not embrace the chance for their democratic institution to be accountable where does that leave the process of devolution in Wales? The move to devolve the raising of income tax to Wales is a long overdue step to making Wales and its Assembly more accountable, efficient, empowered, disciplined and transparent. It cannot be put at risk by a snapshot of public opinion on one day.
If, therefore, it is not democracy that is the problem, then what is it? It is likely that is a fear that the Welsh electorate would be susceptible to the promise of a tax cut from the Welsh Conservatives. If so, then it is only right to reject these fears. Such a choice, if it were offered, is a choice for the people of Wales and would merely demonstrate an extra layer of nuance in Wales’ maturing democracy.
For many, the age of 18 is where one would gain their financial independence. The Assembly, which turns 18 next year, should be entrusted with that maturity and responsibility also. It should not be mollycoddled for fear of suitors promising cheaper wears. By creating the referendum requirement you are giving the Welsh people and the institution by which they are served, the opportunity to stay in a state of perpetual immaturity. In life you rarely get the chance to choose when you come of age, but it is even rarer still, to get the chance to put such a decision on hold.