Teaching Comparative Government and Politics

Wednesday, November 06, 2013

Taxation and responsive government

What is the logical link between taxation and representative government? This most often comes up when discussing rentier systems. But the same arguments can be had about dependencies like Scotland, Wales, and Northern Ireland.

Can a government that doesn't depend upon its constituents for income really be representative or legitimate?

Scotland is offered the chance to hold a referendum on independence. Wales now will be given the opportunity for a referendum on taxation. Is devolution being used to create responsive and legitimate government?

Wales offered tax raising powers

The Welsh government will be offered some control over income tax subject to a referendum, Prime Minister David Cameron has said…

At present Wales' devolved administration cannot vary taxes or borrow money, and gets its budget in a grant from the Treasury.

Last November the Silk Commission, set up by the Westminster coalition, said the Welsh government should be responsible for raising some of the money it spends.

It included a recommendation to devolve powers to vary a portion of income tax by 2020, following a referendum.

Mr Cameron said… "Today we are announcing more power for the Welsh people and the Welsh government.

"Power that's about building this country up, power that's about making sure we have real accountable government here in Wales…

"I think it is good for a government to be responsible for raising some of the money it spends… "

"WHAT THIS MEANS" by Brian Meechan BBC Wales Business Correspondent

Having more powers is one thing but, of course, it is how you use them that really matters.

The Welsh government will now be able to borrow money, like other devolved administrations.

Ministers have already indicated that this will fund the M4 relief road around Newport.

M4 in dark blue

Business leaders, including the CBI Wales [CBI is the major business lobbying group in the UK], have welcomed this as a vital improvement that will benefit the economy.

The Federation of Small Businesses disagrees. It says small and micro businesses would benefit more if the expected £1bn that is planned for the M4 was spent on other projects including road improvements across Wales rather than in one area...

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