Welsh budget funding deal with Treasury expected

Welsh budget funding deal with Treasury expected


A new agreement on the funding the Welsh Government gets from the UK Treasury is expected to be announced.

The deal will set out how the arrangements will work once new taxes are devolved to Cardiff Bay.

From April 2018 a Land Transaction Tax, replacing stamp duty, and a Landfill Tax will be collected by the Welsh Government.

Measures are also in place for the partial devolution of income tax, though no timetable has been agreed.

The deal is the culmination of discussions between UK and Welsh Government ministers and officials over the past three months.


The vast majority of funding for the Welsh Government's annual budget of around ?15bn comes directly from the UK Treasury.

But this is likely to be reduced once the administration in Cardiff begins to levy and collect its own taxes.

In October, academics from Cardiff University and the Institute for Fiscal Studies warned that the Welsh Government could lose hundreds of millions of pounds if the deal did not take account of lower tax proceeds in Wales due to "substantially lower" incomes than other parts of the UK.

Welsh budget funding deal with Treasury expected

We will not know for certain until later on Monday, but the negotiations between both governments appear to have been much less tortuous than those that went on with the Scottish Government.

A fiscal deal for Scotland was negotiated at the start of the year.

But that was after the deadline for the deal was extended amid disagreements between the two sides.

If that has happened here, neither the UK or Welsh Government have made it public, although the extent of the tax powers devolved to Scotland are much greater than those coming to Wales.

Given that Wales' Finance Secretary Mark Drakeford was predicting that a deal would be done by the start of 2017, it does seem to have been a smoother ride.



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