Carwyn Jones suggest tax changes

First Minister Carwyn Jones is to set out proposals to change the way the Welsh Government is funded.

It is understood his “comprehensive package” of taxes and borrowing powers could suggest control of stamp duty and air passenger duty.

Mr Jones is due to make a statement in the Senedd on Tuesday when he will set out what he wants to discuss with the UK government.

The Welsh Government has called for fundamental reform by the Treasury.

The main demand is to change the Barnett formula, which is used to determine the budget of the devolved administrations.

After plans to let the Scottish Government borrow money were announced this month, Mr Jones said the case for borrowing powers for Wales was “unassailable” and that the UK government should deliver them as soon as possible.

“Wales cannot remain the only part of the UK where the government cannot borrow to fund roads and hospitals,” he said.

But a Downing Street adviser to the previous Labour administration warned that repaying borrowed money would stretch the Welsh Government’s budget.

John McTernan said: “That would put pressure on a budget that’s already under pressure so it will be very difficult to maintain all the free things that are there or the subsidised things.”

In March, Mr Jones said control over income tax and corporation tax should not be devolved without a referendum.

But last week the Welsh Government said that although it was not actively seeking the devolution of corporation tax, it would expect the power to be offered to Wales if it was given to one of the other devolved nations.

The UK government has said it will launch an inquiry into the way Wales is funded, but its main priority is to deal with the UK’s finances.

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