Conservatives: Welsh high earners 'should pay less tax' 25 February 2013 Last updated at 06:46 Higher earners should get a temporary income tax cut if tax powers are devolved to the Welsh assembly, the leader of the Conservative group says. Andrew RT Davies believes the 40p tax rate - paid by 89,000 people in Wales - should be cut to encourage enterprise. The Conservatives have not said by how much they believe the tax should be cut, or for how long. A 1p cut in the 40p rate would cost between £12m and £16m a year. The idea, to be unveiled in a speech by Mr Davies in Cardiff on Monday, comes as Welsh parties begin to develop distinct tax policies for the first time. The Silk Commission examining further devolution has proposed that the Welsh government should have the power to vary income tax by 2020, and the Liberal Democrats have already proposed a cut in the basic rate of tax from 20% to 18%. Daniel Davies BBC Wales political reporter The publication of the first Silk commission report last year is changing the nature of politics in Cardiff Bay. Since it opened for business in 1999, the assembly has heard a lot of argument about how to spend public money - much less about how to raise it. Silk recommended the Welsh government should raise more of its own revenue, shifting the balance away from its dependence on a block grant from the Treasury. Political parties in the assembly are now talking about what they would do if those tax powers were devolved. The Liberal Democrats have proposals to cut the basic rate of income tax. Now the Conservatives have chipped in by offering a temporary tax cut at the other end of the income scale. Whether or not you like what they are saying, the fact they are saying it at all proves things are changing. Advocates of devolution will tell you it shows politics in the assembly is maturing. Tax is one of the most important levers that any government has at its disposal. And with income tax being the most important, its devolution as recommended by an independent commission is a real game changer," Mr Davies will say. If some elements of income tax are devolved, it would in my view be necessary to look at a period of reduced taxation for the entrepreneurial, whether private or public sector - those paying the 40% tax rate. This would not only send out a strong sign to business in competing regions of the UK, but it would spell out that Wales is well and truly open for business. A tax cut would encourage a "a spirit of greater enterprise in our country," he will add. In November the Silk Commission report called for a referendum to allow the Welsh government to vary income tax by 2020. The changes would make the Welsh government responsible for raising around a quarter of its own budget. At the time First Minister Carwyn Jones said the Welsh government was not seeking tax powers in order to raise them. "The whole point about getting taxes devolved is not to increase them, it's on occasion to decrease them as well," he said.