BUSINESS rates paid by firms in Wales are set to be fully devolved to the Assembly under new powers announced this morning.

Liberal Democrat Chief Secretary to the Treasury Danny Alexander today laid out more detail on Prime Minister David Cameron’s declaration that Wales would get some tax and borrowing powers

He said Wales could also create new taxes as well.

Mr Alexander the detailed response to last year’s recommendations of the Silk Commission represented a “major step forward for Wales within the United Kingdom.”

He outlined that the UK Government would agree to devolve business rates, stamp duty land tax and “crucially provide the Welsh Government with the power to create new taxes too”.

A Welsh reserve would also be provided to “enable the Welsh Government to save revenue during the good years”, he said.

The UK Government also confirmed, as expected, that the Welsh Government will be given early access to limited borrowing powers to allow the M4 Relief Road to get underway, before taxes are devolved.

Iestyn Davies of the Federation of Small Businesses welcomed the move to devolve business rates, saying: “There is now no barrier to the Welsh Government reforming the business rates system to support small firms on high streets across Wales.”

Currently business rates are partially devolved to Wales but the revenue generated does not affect how much the Welsh Government is funded by.

At the beginning of November Mr Cameron announced that stamp duty land tax and landfill tax would be devolved to Wales alongside powers to borrow, while the Assembly would be empowered to hold a referendum to vary income tax, if it wanted to.

Under the proposals announced today ten per cent of income tax would be given to the Welsh Government, but that the Assembly would only be able to vary all rates at the same time, as in Scotland.

First minister Carwyn Jones has previously said there shouldn't be a referendum before the way Wales is funded is reformed.

Welsh Secretary David Jones, who sat alongside Mr Alexander and Welsh finance minister Jane Hutt at the announcement, said Tories would campaign for a lower income tax in a referendum campaign.

Ms Hutt, speaking alongside Mr Alexander in Cardiff, said she had been “encouraged by the way all four parties in the Assembly" worked to bring about the reforms.

Legislation for the measures is expected to be passed before the 2015 general election.