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Welsh Government to be given power to vary income tax rates from April 2019

Powers to vary income tax rates in Wales will come into force from April 2019 without the need for a referendum under a devolution deal struck with Westminster.

The Welsh Government will be able to alter the levy by up to 10 pence once the changes are introduced.

It will also be able to invest more money in infrastructure after its borrowing cap was doubled to £1 billion.

Welsh Secretary Alun Cairns said: "Agreement on the fiscal framework is a significant milestone in the Welsh devolution journey.

"It lies at the heart of the Wales Bill's determination to provide secure long-term funding for the Welsh Government and give Cardiff Bay greater visibility when looking at spending decisions.

"We have worked hard to arrive at a deal to provide the Welsh Government with a clear financial structure with which it can push on with improving the Welsh economy.

"This framework underlines the mature relationship between Westminster and Cardiff as we move closer to agreeing a lasting settlement for the people of Wales."

The new "fiscal framework", which has taken months to thrash out in negotiations between Cardiff and Westminster, includes devolution of stamp duty land tax and landfill tax.

It also introduces a new "needs-based" element to the Barnett formula that allocates funding to Wales.

UK ministers insist the Welsh Government will be no better or worse off at the point that it takes on new tax powers.

The Conservatives pledged to hold a Welsh referendum on tax varying powers in their 2015 general election manifesto but the Wales Bill currently before Parliament would remove the need for a vote.

Tory and Labour MPs have previously opposed plans to remove the need for a popular vote on the changes.

Welsh finance minister Mark Drakeford said: "I am pleased we have been able to reach agreement about a new fiscal framework which puts our funding on a stable and long-term footing. This is an agreement which is fair to Wales and the rest of the UK."

He added: "This package of measures paves the way for partial income tax devolution in Wales.

"But crucially it protects our budget from the range of undue risks that could arise following the devolution of tax powers from 2018 and provides additional flexibility to manage our resources."

The new powers will have to be voted on by the National Assembly through a l egislative consent motion on the Wales Bill.

UK ministers said they were confident the package will be approved.

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