This is the second in a series of reports by researchers from Cardiff University’s Wales Governance Centre and the Institute for Fiscal Studies on the 2016-17 Fiscal Framework Negotiations for Wales. A previous report outlined options for adjusting the Welsh block grant after tax devolution, demonstrating that hundreds of millions of pounds are at stake for the Welsh budget. This report focuses on the expenditure side, namely the Barnett formula and how a funding floor might interact with the block grant after taxes are devolved to Wales from April 2018.
The UK Government and the Welsh Government are currently discussing the future of a ‘funding floor’ for Wales, designed to protect the relative level of government spending per head in Wales. A new report by researchers from Cardiff University’s Wales Governance Centre and the Institute for Fiscal Studies assesses three options for the floor, and considers how such a floor might interact with the Welsh block grant after taxes are devolved to Wales from April 2018.
A landmark new report by the Wales Governance Centre (WGC) at the University of Cardiff, Government Expenditure and Revenue Wales 2016, gives the clearest picture yet of the state of welsh public finances. Guto Ifan and Ed Poole at the WGC, explain that the report shows that public sector expenditure for Wales exceeded public sector revenues by £14.7 billion in 2014-15.
The suggestion that an increase in the additional rate would lead to a mass migration of wealthy Scots has been widely - and rightly - criticised, says David Eiser. However, the likelihood of widespread tax avoidance by higher earners is a very real one.
The SNP has been taking a lot of criticism for its failure to support a rise in the Additional Rate to 50p.
Does Nicola Sturgeon’s refusal to increase the Additional Rate of Income Tax to 50p unless it is increased in the rest of the UK undermine the case for tax devolution? David Eiser argues that there were always going to be constraints on the exercise of devolved powers and incumbent governments have to decide how these relate to the wider policy context.
The Smith Commission Agreement, published on 27 November 2014, set out proposals for substantial fiscal devolution to the Scottish Parliament. The Scotland Bill – due to receive Royal Assent shortly – will enshrine these powers in law.
As the Brexit process continues, the Conservative Party is finding it hard to reconcile its desire to leave the EU with its longstanding commitment to maintaining the territorial and political union of the United Kingdom. CCC Fellow Professor Michael Kenny (University of Cambridge) argues that, far from introducing a destabilising element to an otherwise sound constitutional set-up, Brexit has instead amplified and accelerated the debate about the UK’s territorial constitution.
Two years after the invocation of Article 50, CCC Co-Director Professor Nicola McEwen analyses the state of relations between London and the devolved administrations, warning that if Brexit damages the autonomy of the devolved institutions without increasing their influence, relationships between the UK’s territories may become ever more strained.