A giant leap or just one small step?

Tweet The Western Mail yesterday was in no doubt at all that the detailed response of the UK Government to Silk was a ‘giant leap’; others, including Jess Blair and Lee Waters were rather more circumspect.

With all due respect to any Greek readers, the old adage about Greeks bearing gifts seems somehow appropriate when those who had long seemed to be arch enemies of devolution turn out to be such vociferous supporters of devolving a limited range of taxation powers. 

Those welcoming the boost for the property and construction industries don’t always look like natural supporters of devolution either, but reading between the lines, it seems that their support actually has little to do with the question of where the tax levels should be set, and a great deal to do with their belief that devolved taxes will go in only one direction – down.

Similarly, the support of the Tories for a yes vote in any referendum on income tax seems to be predicated on an assumption that the people of Wales will then vote for a party (such as the Tories) which promises to cut taxes.  They may be right, but all of these instinctive tax cutters are being less than entirely honest about how they will then balance the Welsh budget.

Simply promising to cut every tax in sight when they’ve spent so long talking about the size of the Welsh budget deficit seems a curious approach to fiscal prudence.  But I suppose they’ve already factored in the unlikelihood of them every having to honour any promises they make.

In practice, it seems that even the Welsh subsidiary of the Conservative Party is showing some signs of understanding that the inability to disentangle the different rates of income tax makes the power to vary tax rates considerably less attractive as a practical option.

It’s still not clear to me how much freedom the Welsh Government will have to decide what to do with its new borrowing powers either.  All the talk has been about just one or two schemes – and Glyn Davies went so far as to suggest that the power would only be devolved if it was to be used on two specific schemes - the M4 and the A55. 

The whole package looks increasingly like a classic example of power devolved being power retained.