Further devolution from the UK to Wales is a step closer after the Secretary of State for Wales David Jones unveiled yesterday a draft bill that could enable the Welsh Assembly to receive tax and borrowing powers. The bill needs to be passed by Westminster. It includes some -but not all- of the recommendations that were proposed by the Silk Commission one year ago.

According to the Secretary of State office, the Welsh National Assembly will be able "to legislate about devolved taxation, specifically stamp duty land tax and landfill tax". It will allow the Welsh Government to borrow money "for capital expenditure". It also foresees that the Welsh executive can call a referendum on the partial devolution of income tax. Welsh voters must endorse the move before it can be implemented.

The UK Government said last month that Wales could be "in control of £3 billion of tax revenue" after the entry into force of the new distribution of powers.

Welsh Government welcomes draft bill

According to Welsh Finance Minister Jane Hutt, the draft bill "represents an important milestone on the journey towards a better financial settlement for Wales". Hutt argues that "access to borrowing powers is particularly important, since capital investment is vital if we are to support the recovery".

Welsh Prime Minister Carwyn Jones (Labour) said last month that his government had "not yet" plans for the income tax referendum to be held. But UK Prime Minister David Cameron (Conservative) said last week that he would be supporting the partial devolution of income tax.

Pro-sovereignty Plaid Cymru considers that the Welsh Government should "press ahead" so that the referendum can be held at an early date: "Wales will only get substantial investment powers if an income tax sharing arrangement between the Welsh and UK governments is implemented", Plaid Cymru's Elfyn Llwyd MP has said.