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Welsh to vote on new tax powers
The people of Wales will vote in a referendum to decide whether to take control of powers over income tax, David Cameron and Nick Clegg have announced.
The Prime Minister and his Deputy said Wales would be given a new ability to borrow and control over stamp duty revenues as part of the package of measures giving more responsibility to Cardiff Bay.
The leaders of the Westminster Government said decisions about Wales' future had been taken by Whitehall bureaucrats for too long and it had "suffered" as a result.
Under the new measures a referendum will allow the Welsh to decide on whether to take up some powers over income tax, as has already happened in Scotland.
Under the Scottish system, due to come into force in April 2016, the UK Treasury will deduct 10p from income tax and give MSPs the power to decide how to raise the shortfall, opening up the possibilty of lower or higher rates in different parts of the UK.
Setting out the reasons for the changes in a joint article for the Western Mail, Mr Cameron and Mr Clegg said Wales had suffered from lower living standards, higher unemployment and greater levels of child poverty even at times when the British economy had been doing well.
"We're determined to tackle this head on," they said. "We want this to be the Government that finally sorts this out. There is nothing inevitable about a country's fate and certainly not somewhere with as proud a history as Wales.
"If the right decisions are made now - and if we have the courage to see them through - then this vital member of our family of nations can and will succeed in the century ahead."
Setting out how they wanted Wales to share in the economic recovery, the two men said they wanted young people in Wales to "know that there's a future for them - that they don't have to move to London or go abroad to get on in life and achieve their dreams".
The PM and his Deputy, who will meet Welsh First Minister Carwyn Jones to discuss the new devolution settlement, said: "For too long decisions about Wales' future have been directed by bureaucrats hundreds of miles away in Westminster - and it has suffered as a result.
"Wales could benefit hugely if the Government at Cardiff Bay was responsible for raising more of the money it spends. "
The new package builds on the recommendations of the Silk Commission, which reported last November and recommended a series of tax and spending powers should be devolved.
Promising the "devolution of some finance raising powers" the coalition Government leaders said it would allow Mr Jones' administration to begin work on upgrading the M4 - replacing a "road network from a bygone age".
Wales will have control over stamp duty "bringing in money that can be spent on big Welsh priorities like much needed affordable homes".
Setting out the process for devolving responsibility for part of income tax, Mr Cameron and Mr Clegg said: "Wales shouldn't depend on London for these decisions.
"So the Silk Commission proposed that there should be a referendum on devolving certain income tax powers. And that's what's going to happen.
"We'll provide for a referendum to take place so that people in Wales can decide whether some of their income tax should be devolved, in the same way as it is in Scotland."
The coalition leaders added: "This is a government that believes in devolution and is determined to deliver on devolution.
"If you get the balance right between the UK Parliament and a devolved institution then you can get the best of both worlds - and that's true whether you live in Wales, Scotland or Northern Ireland. "