The income tax powers offered by the UK Government to the Welsh assembly are “pretty much useless,” according to First Minister Carwyn Jones.
“As a way of encouraging the economy to grow it’s pretty much useless,” reads his full statement.
The Welsh Labour Leader will give evidence to MPs early next week on the draft Wales Bill, which was publicised last November by Prime Minister David Cameron during a visit to Cardiff.
The Bill was to give the Welsh Government independent power to set its own rates for income tax.
Yet the restrictions to the Wales Bill – which features a “lock-step” system whereby any changes to the tax bands must be replicated on all tax bands – means a cut of basic rate tax by GBP 00.01 would create a GBP 00.01 cut across all taxes.
The same “lock-step” conditions apply to any raises in taxes as well.
Carwyn Jones has also slated the restrictions in a interview with BBC Wales.
On the other side of the fence, Welsh Secretary David Jones has stated his opinion the Wales Bill will support economic growth.
2013 in review
The First Minister and Welsh Secretary both highlighted the positive economic signs and outlook for Wales in the first quarter of 2014.
Both political leaders cited the record numbers of employment last year in their New Year Messages – with Jones also calling attention to the swathes of foreign investment in Wales over 2013.
However, the First Minister conceded it was still a tough time for many individuals across the country.
He stated, “We are open and honest about the challenges we face but our commitment will not falter,” going on to state that the country was “recovering well from one of the longest economic downturns in living memory.”
Wales is currently outperforming the UK as a whole with record numbers of people – including many younger workers – currently in employment.
Yet “spiraling living costs, combined with changes to the welfare system, are clearly impacting upon people’s ability to meet day-to-day costs,” Carwyn Jones continued.
Meanwhile Welsh Secretary David Jones said the UK Government needs to remain focus and hold its nerve amid fresh challenges in 2014.
He shared his view that the Conservatives – his political party – had inherited an “appalling legacy” yet it was only by “holding our nerve have we been able to rise to the challenge and become the fastest growing economy in the Western world.”