Silk Commission split on referendum about tax powers

John Osmond reports on Welsh attitudes to what we should be asking the voter about

John Osmond is Director of the IWA.

 

The cross-party Silk Commission, which is currently contemplating the future of Welsh devolution, is reportedly coming to a unanimous view that the National Assembly should be given tax-varying powers to enshrine greater accountability. However, I’m told it is split on whether there should be a referendum about it.

As a result the Commission will be keenly analysing some results from this week’s polling by the Wales Governance Centre on Welsh attitudes to questions on which referendums should be held. The responses, shown in Table 1, are more nuanced than might be expected and will enable some comfort to be drawn by both sides in the referendum debate within the Silk Commission.

Table 1: Attitudes to whether there should be a referendum on a range of Welsh issues

These answers on whether there should be a referendum were given in response to the following propositions:

  • Shops should be required to charge 5p for carrier bags.The Welsh Government should be given the power to borrow money to spend on capital projects such as building roads and hospitals.
  • The Welsh Government should be given the power to change levels of landfill tax and air passenger duty in Wales.
  • The Welsh Government should be given the power to raise or lower the basic rate of income tax in Wales by up to 3p in the £.
  • Whether or not the Welsh Government should be given complete control over all taxes paid in Wales
  • Whether or not Wales should become an independent country.
  • Whether or not the Monarchy should be abolished.

So far as the Silk Commission is concerned it will be most interested in the responses to the questions on taxation. A small 44 to 41 per cent majority didn’t think that a referendum should be required to allow the Assembly to be able to vary income tax up or down by 3p in the pound. This is the power currently enjoyed by the Scottish Parliament, and approved in the second question in the Scottish referendum in 1997.

On the other hand a larger plurality, by 52 to 32 per cent, believes that a referendum would be necessary if all taxes were to be devolved to the National Assembly.

The dilemma for the Silk Commission is that it won’t be recommending either of these options, but something inbetween. This ‘something’ could be along the lines of the Calman recommendations for the Scottish Parliament that have just been enshrined in the Scotland Act that was signed by the Queen into law yesterday. In it Scotland will be given powers to vary 10p of the current income tax rate across all the tax bands. It won’t be given a choice about this since Westminster will pass on income tax minus the last 10p. As a result the Scottish Parliament will be forced either to add 10p to keep its current spending level or increase or decrease it, as much as they like either side.

Of course, for Scotland all this might be overtaken by the forthcoming referendum on independence, scheduled for autumn 2014, or whatever the Westminster Government might come up with as an alternative, in the form of ‘devolution-plus’ – that is, greater powers than currently contained in the latest Scotland Act.

The question for us is this: would such a settlement as contained in the current Scotland Act, if recommended by the Silk Commission, require a referendum to endorse it? On the basis of this week’s Welsh Governance Centre poll you could argue either way. So why didn’t the pollsters ask the ‘inbetween’ question? According to Wales Governance Centre Director, Professor Richard Wyn Jones, it would have been too complicated. How could you explain it to the punters in a telephone, or even an online poll?

This leads directly to a consideration that those Silk Commissioners pressing for a referendum should take into account. Last year’s referendum on moving from Part 3 to Part 4 of the 2006 Wales Act, to give the National Assembly primary legislative powers in its existing areas of competence, was tricky enough to explain to the voter. Try a referendum on income tax varying powers of around 10p in the pound.

Thus was the explanatory preamble the pollsters presented to respondents asked about the issues on which referendum should be held

“Some people think that it is a good idea to give people the chance to decide important political issues themselves by a vote in a referendum. Other people think that it is the job of the politicians we elect to decide major political issues.

“Holding a referendum takes more time and costs more money. But those in favour of referendums believe that it is important for people to have a direct say.

“If decisions had to be made about each of the following issues, please indicate whether you think that those decisions should be made by elected politicians, or by the people in a referendum.”

I wouldn’t like to have to prepare an equivalent ‘neutral’ explanatory preamble to a referendum on tax varying powers. But I suppose that is what the Electoral Commission is for.

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