In a devolutionary deal similar to the one granted to the Scottish government, the Welsh government has been given new powers to set its own rates of income tax from April 2019, as part of an arrangement with the UK Treasury.
The amount of capital borrowing available to the Welsh government will also double to total £1 billion.
The Welsh government has already been given stamp duty powers: it will replace the stamp duty land tax (SDLT) currently charged in the rest of England with its own land transaction tax (LTT) and landfill tax from April 2018.
The Welsh government’s Cabinet Secretary for Finance and Local Government, Mark Drakeford, commented: ‘This is an agreement which is fair to Wales and the rest of the UK.
‘It ensures fair funding for Wales for the long-term, something we have consistently made the case for.
‘But crucially it protects our budget from the range of undue risks that could arise following the devolution of tax powers from 2018 and provides additional flexibility to manage our resources.’
Meanwhile, David Gauke, Chief Secretary to the Treasury, stated: ‘We are delivering on our commitments and the Welsh government can now decide how to use their greater powers and responsibilities to grow and support the Welsh economy.’
