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New devolution package agreed for Wales

The government has agreed a new devolution package for Wales, which David Cameron said “removed the last remaining barriers” to an income tax referendum.

Cameron unveiled the proposals with Nick Clegg at Millennium Stadium in Cardiff today, following months of cross-party negotiations. They include guaranteed minimum funding for the Welsh government and allowing ministers in Wales to raise cash from the money markets for major projects.

As part of the agreement to set a minimum amount of funding for the Assembly there is an “expectation” that Wales will hold a referendum on receiving some devolved income tax powers.

Whitehall ministers are said to have insisted that referendum must happen in return for the funding pledge, but Kirsty Williams, Welsh Lib Dem leader, is reported to have been adamant that the introduction of the funding floor should not be wholly dependent on an income tax referendum and lobbied hard on the issue.

Under the Wales Act, which passed in December last year, a referendum can be held to give Welsh ministers the power to vary income tax, but Labour opposes the idea and has not moved to do so.

Cameron said the referendum "should go ahead and I would advise people to vote yes".

The powers are expected to be granted under what the government is calling the St David’s Day agreement. They were promised following the referendum on Scottish independence.

Other measures included in the agreement include control of fracking and more energy projects and giving the Welsh Assembly control of its own elections.

The Assembly would also have the power to change its name to the Welsh Parliament and give 16-year-olds the franchise.

Powers to set the national speed limit across Wales have also been included, as has a promise to consider the possibility of devolving Air Passenger Duty.

Clegg said he was "delighted to be coming to Wales to announce this new constitutional settlement, another landmark on the journey of decentralisation".

Plaid Cymru leader Leanne Wood said the new package stood in "stark contrast" to the reforms being offered to Scotland.

She told BBC Radio Four's Today programme: "Wales has been left behind and that has to end, and this is a missed opportunity in that respect."

(Image source: Ben Birchall/PA Wire)

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