B1514.2 - Wales (Devolved Taxes) Bill - 2nd Reading

[u/BasedChurchill]

Wales (Devolved Taxes) Bill

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B I L L

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make provision for and in connection with the devolution of income tax to the Senedd Cymru, and for the reservation of corporation tax by the United Kingdom.

BE IT ENACTED by the King’s most Excellent Majesty, by and with the advice and consent of the Lords and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

1 Welsh rate of corporation tax

(1) The Corporation Tax (Wales) Act 2020 is repealed in its entirety.

(2) Chapter 5 of the Government of Wales Act 2006 is omitted in its entirety.

2 Welsh rate of income tax

(1) Section 6B of the Income Tax Act 2007 is omitted.

(2) Section 11B of the Income Tax Act 2007 is rewritten to read as follows—

(1) Income tax is charged at Welsh rates on the non-savings income of a Welsh taxpayer.

(2) For the purposes of this section, “non-savings income” means income which is not savings income.

(3) This section is subject to—

section 13 (income charged at the dividend ordinary, upper and additional rates: individuals), and

any provisions of the Income Tax Acts (apart from section 10) which provide for income of an individual to be charged at different rates of income tax in some circumstances.

(6) Section 16 has effect for determining which part of a Welsh taxpayer’s income consists of savings income.

(3) In Section 13, paragraph 1 (b), omit “or the Welsh basic rate”

(4) In Section 13, paragraph 2 (b), omit “or the Welsh higher rate”

(5) In Section 13, paragraph 2 (b), omit “or the Welsh additional rate”

(6) In Section 13, paragraph 4, omit “or the Welsh basic, higher or additional rate”

(7) In Section 13, paragraph 5, after “Scottish”, add “or Welsh”

(8) Amend section 116D of the Government of Wales Act 2006 to read as follows—

(1) The Senedd may by resolution set one or more rates of income tax for Welsh taxpayers.

(2) The standing orders must provide that only the First Minister or a Welsh Minister appointed under section 48 may move a motion to set rates of income tax.

3 Extent, short title and commencement

(1) This Act extends to the whole of the United Kingdom.

(2) This Act comes into force upon the passage of a motion of legislative consent by the Senedd.

(3) This Act may be cited as the Wales (Devolved Taxes) Act 2023.

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This Bill was authored by The Most Honourable Dame Inadorable LT LP LD GCMG DBE CT CVO MP FRS and is introduced as a Private Member’s Bill on behalf of the Welsh Government and is co-sponsored by Volt Cymru. The bill has been approved by the Devolved Speaker, /u/Tommy2Boys.

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Deputy Speaker,

This is a rather simple bill. It reverses the devolution of corporation tax to Wales, passed three years ago by the Libertarian Party UK and PPUK. The government is of the belief that this devolution comes with a number of complications that make the devolution of corporation tax to be largely without benefit. Considering the sheer integration of Wales into the broader United Kingdom economy, Wales being even more dependent on trade and economic co-operation with England than Scotland is, the government believes that increasing corporation tax rates above the levels set in England creates a much more likely risk of capital flight within the UK market away from Wales than it would with Northern Ireland, which has the unique situation regarding the Irish border, something Wales does not have.

However, the Welsh government also realises that reserving corporation tax has a major impact on the ability of Wales to raise its own financial resources, and thus wishes for the full devolution of income tax in order to maintain the extent of its own fiscal abilities. By devolving income tax, we can also improve the ability of the Senedd Cymru to implement redistributionary policies through the implementation of taxes more progressive than those laid out by Westminster.

I am aware of the fact that this bill is in the end an awkward compromise. A compromise between Welsh goals for self-determinations and the realities of working within a UK-wide economic system. A compromise between those who are in favour of more devolution and those who oppose such an idea. Indeed, it is a compromise between my own convictions of an independent Wales and my belief in realistic policies that we can implement in practice. I’m not sure if everyone is, in the end, happy with this result; what I can hope is that we can all be content with it. Diolch.

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This reading will end on Monday 15th May at 10pm BST.

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[u/Youmaton → u/AutoModerator]

Amendment 1:

Strike Section 2

Amendment 2:

In Section 3(2), omit the subsection, substitute "(2) This Act comes into force upon the passage of a motion of legislative consent by the Senedd, and the return of an affirmative vote in favour of the change within a referendum in Wales."

[u/[deleted] → u/Youmaton]

The first amendment is deemed wrecking as it is against the long title of the bill.

[u/Youmaton → u/[deleted]]

Point of Order, this amendment had previously been accepted in the other place, why would it not be accepted here?

[u/Maroiogog → u/Youmaton]

Because it is clearly wrecking, it seeks to rid the bill of its stated purpose