I shall speak to several amendments, in particular amendment 11, which provides that income tax powers may not be devolved to the Welsh Assembly until a fiscal framework has been approved by both Houses of Parliament and the Welsh Assembly.
We have always said that a fiscal framework must ensure that Wales is not disadvantaged by taking on the devolution of some income tax powers. In the wake of the EU referendum result, it is all the more urgent that the Government develop a coherent and redistributory regional funding strategy not just for Wales, but for the whole of the UK.
The EU uses specific criteria for designating the areas that should receive structural funds by comparing the income of an area with the EU average. Areas in Wales such as the valleys and west Wales have benefited because they have a GDP that is less than 75% of the EU average, as has Cornwall, and many other areas have benefited because their GDP is between 75% and 90% of the EU average, including south Yorkshire and Merseyside. It is, broadly speaking, a needs-based system. As Members across the House will remember, Holtham recommended that funding for Wales should be based on a needs-based formula. However, a sophisticated formula would take time to develop.
It is simply unacceptable for Wales to accept the devolution of income tax without an order in both Houses and the consent of the Welsh Assembly, because those measures would give elected Members the chance to discuss the funding and the fiscal framework so that we do not see a cut to our funding and then get told to make up the rest by increasing income tax.