The devolution of tax powers to Wales marks a significant milestone in devolution as Wales will become responsible for raising a proportion of its own revenue to spend on public services.

From 1 April 2018, Wales will have two new taxes – land transaction tax will replace stamp duty land tax and landfill disposals tax will replace landfill tax. 

Together they are estimated to generate more than £1bn in the first four years.  

Two Bills to establish these new taxes are currently being scrutinised by the National Assembly for Wales – Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Bill passed stage three in the National Assembly earlier this week.

The Welsh Revenue Authority (WRA) will be responsible for collecting these two Welsh taxes. Finance Secretary Mark Drakeford has announced that Kathryn Bishop will be the first chair of the WRA; the non-executive board members will be appointed in the summer.

From April 2018, Wales will also be able to use new borrowing powers of £1bn to invest in capital projects in areas of devolved responsibility.

Professor Drakeford said:  

“In just over a year, stamp duty land tax and landfill tax will be devolved and Wales will introduce the first Welsh taxes in almost 800 years. 

“This is an historic milestone in Wales’ devolution journey as we become responsible for raising our own money to spend on public services. The next step will be Welsh rates of income tax, which we are committed to introducing in April 2019.

“These taxes bring additional responsibility for the Welsh Government and the National Assembly – to those who pay taxes and those who depend on the public services which are funded by them.

“These new tax powers provide us with the opportunity to reshape and make changes to improve existing taxes to better meet Wales’ needs and priorities. We will use them to help improve fairness and support jobs and economic growth in Wales.  

“A huge amount of work is already underway to prepare for these tax powers.  We have consulted widely and listened to a range of stakeholders to help us develop these taxes and will continue to do so as they make their way through National Assembly scrutiny.”

This evening the Prime Minister called Dutch Prime Minister Mark Rutte following yesterday’s UK letter of notification to the European Council.

The Prime Minister underlined the UK’s determination to agree a deep and special partnership between the UK and the European Union.

Both Prime Ministers agreed that the UK would remain a close and committed ally, and that they would approach the talks to come in a constructive manner.

The loans will be sold to Prudential plc and to funds managed by Blackstone. There will be no changes to the terms and conditions of the loans sold. Borrowers do not need to take any action.

The price achieved reflects the strong credit quality of the portfolio and the outcome of a highly competitive sale process. It delivers value for money for the taxpayer and compares favourably with the ‘fair value’ of the B&B loan book disclosed in B&B’s accounts last year. The fair value of the B&B loan book is less than its book value, reflecting the low interest rates payable on the loans.

UK Asset Resolution (UKAR) manages Bradford & Bingley and NRAM’s closed loan books on behalf of the taxpayer. Allowing for today’s transaction, UKAR’s balance sheet now stands at £22 billion, down from £37 billion in September 2016 and from £116 billion in 2010.

Chancellor Philip Hammond said:

The sale of these Bradford & Bingley assets for £11.8 billion marks another major milestone in our plan to get taxpayers’ money back following the financial crisis.

We are determined to return the financial assets we own to the private sector and today’s sale is further proof of the confidence investors have in the UK economy.

At Budget 2016, the government announced that it would explore a programme of sales designed to raise sufficient proceeds for Bradford & Bingley (B&B) to repay the £15.65 billion debt to the Financial Services Compensation Scheme (FSCS) and, in turn, the corresponding loan from the Treasury. Today’s (31 March 2017) sale is the first in the programme.

The programme of sales is expected to conclude in full before the end of 2017-18. Any further sales will be subject to market conditions and ensuring value for money.

Six months ago, ConservativeHome wrote that Britain must make a collective decision about what kind of country it wants to be post-Brexit, and that there are two different roads it can take.

“The first is what might be called Open Britain.  Its starting point would be that our economy needs to be as open as possible if it is to flourish after Brexit.  Business taxes would be slashed.  So would regulation – including much of that social and employment law that Conservatives for so long itched to get back from Brussels.  We would become a kind of Panama for money from overseas.  Trade deals would be framed simply to get the best deal possible for exporters; those steel imports from China, say, would flow into Britain.  All this sounds like a Thatcherite vision for our economy, but it does not necessarily imply a passive state.  Government could be active in the sense of going for big infrastructure decisions more determinedly than has usually been the case.  More runways would be tacked on to Heathrow and Gatwick; airports outside the south-east would be expanded.  Migration would be relatively high.

London and the South-East would be likely to gain most from such a strategy, at least in the short-term.  The losers from imports and high immigration would mostly be concentrated elsewhere – in the Leave-voting North and Midlands among the “ordinary working people” who plumped for Brexit.

Which leads us to the second option.  It begins with the conviction that government cannot let down these voters, without whom Leave’s referendum victory would not have happened.  Social and employment law would be preserved in aspic.  Migration would be low.  Trade deals would not be signed if they would let those steel imports come pouring in – which suggests that few would be signed at all.  Public services policy would stress more spending rather than reform.  Taxes would in consequence be higher than they would otherwise have been.  Investment from abroad would be seen through a national security lens only.  This would be a Closed Britain.  It is difficult to square this vision of the future with the vigorous construction of new airports or nuclear power stations.  We would be more likely to put such decisions off and opt for lower growth.”

The release of the Great Repeal Bill White Paper has stirred a mass of speculation about legal consequences (such as whether the executive is entitled to use so many Henry VIII clauses) and political tactics (such as whether the Scottish Parliament could block the Bill’s effects in Scotland by refusing legislative consent).

But it has also reheated the questions that we asked last autumn.  For example, the Daily Telegraph has chosen this week to launch a campaign “to promise a bonfire of EU red tape in its 2020 manifesto”.  The effect of a Bill whose intention is to keep EU law in the short-term has been to unleash competing views of what Britain should look like in the medium and long.

Parts of this debate are clearly pertinent.  For example, the future of British farming post-Brexit is a real unknown.  As Richard Ali put it recently on this site: “do we want a New Zealand model of little or no support or a Norwegian model of high levels of support designed to keep farmers on the land?  What sort of countryside do we want to see, and who should pay?”  It may well be that Britain’s urban areas are unwilling to fork out for its rural ones – nearly all of which are currently represented by Conservative MPs – but the question is a genuinely unresolved one, at least for the moment.

None the less, there is a temptation to exaggerate the scale and sweep of the choice.  As we put it last autumn, a Closed Britain “is ultimately unsustainable – and, in political terms, not consistent with where the Conservative Party has pitched its tent in modern times”.  Britain has a strong bias towards free trade, powered by our need to export goods.  This basic disposition is not going to change post-Brexit.  It could be that a Far Left government somehow wins office in 2020, and immediately begins to throw up tariff barriers and subsidise loss-making businesses.

But raising that possibility only reinforces how impossible such a posture would be to sustain.  Britain needs businesses to come and invest, to create jobs and wealth.  This is always true, and especially post-Brexit.  Theresa May has got the message.  The months following her Party Conference speech last autumn, which was perceived by parts of business as too inclined to bash it, saw a rhetorical and practical rowing-back.  For example, Downing Street has quietly buried its original plan to compel companies to represent workers on boards.  The Industrial Straetgy has turned out to be an exercise in consultation.

Burning questions remain.  Can Britain deliver social justice for its younger people, so many of whom are currently locked out of home ownership?  As Russia flexes its muscles, are we prepared to devote a higher proportion of spending to defence?  Will we make a necessary shift that from an over-expanded higher education sector – see Graeme Archer’s column below today – to our under-developed vocational and training one?  Are politicians prepared to wean us off the quantitative easing that has shafted saving? Above all, can the country live within its means and end the structural deficit?

Obviously, Brexit will have a scarcely-underestimable impact on the answers to all these. But so does the last Conservative Manifesto, with its protection for richer older retired people (the pensions triple lock; NHS ring-fencing). Ditto the unwillingness of Tory backbenchers to reduce the rate of growth of public spending.  Revolts under David Cameron killed plans for disability benefit and tax credit reform.  An uprising under May stifled Philip Hammond’s plan to change National Insurance Contributions.  The point here is not whether any or all of these plans were right or wrong.  It is that the Commons isn’t currently up for the scale of the challenge.

It is true that Ministers should embrace Brexit as the great challenge which Britain must meet, and tell a story about its plans will rise to it – something that the Chancellor failed to do in the Budget.  It should also start planning now: last autumn, we said that he should begin to consult on the post-Brexit regulatory regime.  But the Government has limited room for manouevre between now and 2020.  Much of the Conservative plan for Britain’s journey must thus be reserved for the 2020 manifesto.

This places a big responsibility on George Freeman, who heads Downing Street’s Policy Board, and Number Ten’s Policy Unit, led by John Godfrey.  But while the pace of the journey is debatable, the destination is not.  We are heading for an Open Brexit – not because politicians and voters will always opt for one, but because it is the only option in the modern world for survival, let alone jobs and prosperity.