The devil is in the details, but the announcement by David Cameron and Nick Clegg that there will be a referendum on the National Assembly getting tax-setting powers is very welcome.
The official Ministerial Statement was published this morning, here, but doesn't say very much more than yesterday's media announcements. More details will be published before the end of the year.
The recommendations in Part I of the Silk Commission's report were put together as a package. As such, it was compromise that took care to balance a range of different viewpoints. But ever since its publication different parties have been calling for only parts of it to be implemented.
Labour has always wanted the borrowing powers, but not the taxation powers. Therefore its position has been to call for immediate borrowing powers and immediate control over some minor taxes, while at the same time saying that a referendum on major tax powers such as income tax should only be held at some, yet to be specified, point in the dim and distant future. This has never been a credible position. The argument that Wales should get borrowing powers on the strength of control over a handful of small taxes simply doesn't stack up, not least because these taxes are likely to be reduced rather than increased.
The only credible way forward is for borrowing and taxation powers to be given at the same time; and if this requires a referendum, that referendum needs to be held before we get either borrowing or taxation powers.
There is plenty of time to do this. We need—and are clearly going to get—a new Government of Wales Act (or perhaps Wales Act) at some time before the next Westminster election in May 2015, and the most obvious time for its provisions to come into force is May 2016. The referendum could therefore be held as late as, say, March 2016. This would mirror what happened in March and May 2011 over primary lawmaking powers.
But it would probably be better for the referendum to be held before this. If we can agree that the Welsh Government should have taxation and borrowing powers sooner—and I think we can get cross-party consensus on this—then there is no reason why the referendum shouldn't be held considerably earlier.
Carwyn Jones has on several occasions made the point that the UK Government needs to give Wales significantly more powers as a sign that it will give Scotland considerably more powers within the UK, in the hope that fewer Scots will then vote for independence. There is some merit in this, especially because the income tax arrangements outlined in Silk Part I are in fact more advanced than those contained in the Scotland Act 2012. So if Carwyn is consistent, he would need to press for our tax referendum to be held before September 2014.