We now move to item 5, which is a statement by the Cabinet Secretary for Finance and Local Government on tax devolution and the fiscal framework. I call on the Cabinet Secretary, Mark Drakeford.

Thank you, Llywydd. In 2018 the Welsh Government, at a national level, will raise its own money to spend on public services for the first time in almost 800 years. This will happen when stamp duty land tax and landfill tax are devolved. This marks an important step in our devolution journey and will be a significant change in the way in which public services are funded.

My predecessor, Jane Hutt, began the process of preparing for this change with the introduction of what is now the Tax Collection and Management (Wales) Act 2016. This legislation was passed unanimously by the fourth National Assembly. To realise the potential of these devolved taxes in full, the Welsh Government will introduce two further Bills. One will be on the land transaction tax and anti-avoidance of devolved taxes and the other will be on the landfill disposals tax.

The Welsh taxes will be fair, and we will ensure that they are as simple as they can be. They will provide stability and certainty to taxpayers and will support jobs and growth. I will focus on our commitments to the well-being of future generations in the development and implementation of our tax policy.

A draft of the land transaction tax and anti-avoidance of devolved tax Bill is published today. This is a long and technical Bill. By publishing a draft of this Bill, I hope that it will give Assembly Members, interested stakeholders and the public time to familiarise themselves with the aims and the structure of its provisions before it is introduced into the Assembly in the autumn.

The public consultation on both the land transaction tax and the landfill disposals tax highlighted the desire for consistency with current UK taxes. Llywydd, I want to be clear: we will not change anything for change’s sake. Our proposals are designed to ensure that the situation becomes more efficient and effective and to ensure a focus on Welsh needs and priorities.

Lywydd, ers diwedd yr ymgynghoriad ar ein deddfwriaeth arfaethedig, ynglŷn â threth trafodiadau tir, rwy’n ymwybodol o'r newidiadau y mae Llywodraethau’r DU a’r Alban wedi eu gwneud i’w trethi eu hunain, yn enwedig y dreth ychwanegol ar ail gartrefi. Ymgynghorwyd ynglŷn â'r newidiadau yn y DU yng Nghymru a Lloegr eleni, ac ar hyn o bryd mae'r ddeddfwriaeth ar ei ffordd drwy Senedd y DU. Byddaf yn cyhoeddi ymgynghoriad technegol am ddull polisi Cymru i sicrhau bod trethdalwyr, asiantau a rhanddeiliaid ehangach yn cael cyfle i gyfrannu eu barn ynglŷn â sut y gallai hyn weithio yng Nghymru, gyda'r bwriad o gyflwyno hyn yn ystod y broses o graffu ar y dreth trafodiadau tir a’r Bil gwrth-osgoi trethi datganoledig.

I droi yn awr at y dreth gwarediadau tirlenwi, defnyddir elfen ar dreth bresennol y DU i gefnogi cronfa cymunedau tirlenwi. Yn ystod yr ymgynghoriad cyhoeddus ar ddisodli’r dreth honno yng Nghymru, cafwyd amrywiaeth eang o safbwyntiau ynghylch yr hyn a ddylai ddigwydd i'r gronfa ar ôl datganoli'r dreth. Mae'r gronfa wedi chwarae rhan bwysig wrth gefnogi cymunedau sy'n agos at safleoedd tirlenwi ac rwy'n falch o gadarnhau y prynhawn yma fy mod i’n bwriadu sefydlu cynllun cymunedau treth gwarediadau tirlenwi i barhau â'r gwaith gwerthfawr hwn yng Nghymru.

Lywydd, bydd Aelodau'n ymwybodol fy mod yn ddiweddar wedi cadarnhau fy mhenderfyniad mai Awdurdod Refeniw Cymru fydd yn arwain y gwaith o gasglu a rheoli’r dreth trafodiadau tir a’r dreth gwarediadau tirlenwi a byddant yn gweithio'n uniongyrchol gyda Chyfoeth Naturiol Cymru ar gydymffurfiad a gorfodi'r dreth gwarediadau tirlenwi. Byddwn yn cynnal ein perthynas adeiladol a chadarnhaol gyda Chyllid a Thollau EM i ddatblygu sgiliau, arbenigedd a gallu o fewn Cymru ym maes gweinyddu treth. Rwy’n disgwyl i Awdurdod Refeniw Cymru ddarparu gwasanaeth o safon uchel i alluogi trethdalwyr Cymru i dalu'r swm cywir o dreth ar yr adeg gywir, yn ogystal â bod yn gadarn ynglŷn ag osgoi talu trethi. Yn yr hydref, bydd y broses o benodi cadeirydd Awdurdod Refeniw Cymru yn dechrau. Bydd y cadeirydd yn gweithio ochr yn ochr â chyfarwyddwr gweithredu Awdurdod Refeniw Cymru i greu'r tîm arweinyddiaeth cywir. Rwy’n rhagweld y bydd y bwrdd llawn wedi’i sefydlu chwe mis cyn i'r awdurdod ddechrau ar y gwaith o gasglu a rheoli trethi datganoledig Cymru.

Ar ôl i’r trethi datganoledig gael eu cyflwyno, bydd rhan o gyllideb Llywodraeth Cymru yn y dyfodol yn dibynnu ar refeniw trethi datganoledig. Gan na fydd Llywodraeth y DU yn cael y refeniw hwnnw mwyach, gwneir gostyngiad cyfatebol i grant bloc Cymru. Bydd y fethodoleg ar gyfer cyfrifo hyn wedi’i nodi mewn fframwaith cyllidol newydd i Gymru, a drafodir â Phrif Ysgrifennydd y Trysorlys ac rwy’n credu y dylai fod gan y Cynulliad hwn y pŵer i’w dderbyn neu ei wrthod. Bydd y trafodaethau hyn yn ystyried sut y dylai'r addasiad i grant bloc Cymru adlewyrchu datganoli llawn treth dir y dreth stamp a threth tirlenwi a sut y dylai weithredu os caiff treth incwm ei datganoli’n rhannol. Yn rhan o'r trefniadau newydd, byddaf hefyd yn ceisio cael eglurhad manwl o sut y defnyddir y llawr cyllid ac am gynnydd yn ein terfyn benthyca cyfalaf.

Lywydd, yn ystod y tymor diwethaf, roedd consensws cryf yn bodoli ar draws y Cynulliad hwn am yr angen i sicrhau bargen ariannu deg i Gymru ochr yn ochr â'n cyfrifoldebau cyllidol newydd. Mae’r consensws hwnnw wedi bod yn fantais ymarferol yn ein trafodaethau â’r Trysorlys. Bydd fframwaith cyllidol synhwyrol yn paratoi'r ffordd i gyflwyno cyfraddau treth incwm i Gymru—penderfyniad yr wyf yn glir y dylai ddal i gael ei wneud gan y Cynulliad Cenedlaethol.

O ystyried y ffaith bod treth teithwyr awyr wedi’i hepgor o Fil Cymru, byddwn yn parhau i bwyso am, o leiaf, ddatganoli treth teithwyr awyr pellter hir uniongyrchol i Gymru. Byddai hyn yn sicrhau cydraddoldeb â Gogledd Iwerddon.

Presiding Officer, taxes fund the Welsh public services that we all rely on. The devolution of taxes will provide Wales with the opportunity to take a more rounded, integrated and long-term view of its finances. The ability to raise taxes provides Wales with an opportunity to involve people in decisions about the levels and extent of raising revenue and also about decisions about how that money is to be spent, and I look forward to hearing Assembly Members’ comments this afternoon. Thank you.

May I also thank the Cabinet Secretary for this statement? It’s right to say that it is a historic statement. The Secretary follows in the footsteps of Richard of Mold, who was the last treasurer of Llywelyn ap Gruffudd in 1283. However, it wasn’t possible for the Owain Glyndŵr parliament to raise taxes, because it’s quite difficult to raise taxes when at war, but at least the Secretary isn’t facing that difficulty. But he does make a fundamentally important point, of course, namely that the essence of democracy—the national democracy that the people of Wales have voted for twice—is the ability, of course, not only to make laws, but also to raise taxes and, in so doing, ensuring that there is real accountability for the services that we offer from the point of view of our society and the future that we can create together for our nation.

Nawr, Ysgrifennydd y Cabinet, fel yr ydych yn ei gydnabod yn eich datganiad, un rhan hanfodol o ddatganoli treth, a gwneud hynny’n llwyddiannus, yw fframwaith cyllidol clir ac ymarferol. Un peth a fydd yn allweddol i hyn, ac, yn anochel, y cur pen mwyaf mewn trafodaethau gyda Thrysorlys y DU, fydd y ffordd y caiff grant bloc Cymru ei addasu i adlewyrchu trosglwyddo pwerau codi refeniw treth i Lywodraeth Cymru. Mynegodd Llywodraeth flaenorol Cymru bryderon am yr addasiad a wnaethpwyd ar ôl datganoli trethi annomestig. Mae peryglon datganoli treth incwm yn rhannol yn glir. Byddwch yn ymwybodol o astudiaeth gan Ganolfan Llywodraethiant Cymru a ddangosodd fod y dosbarthiad incwm gwahanol iawn yng Nghymru o'i chymharu â Lloegr yn golygu y bydd methu ag amrywio'r trothwy, er enghraifft, yn peri anawsterau mawr. Ac felly gallai mecanwaith anghywir gostio cannoedd o filiynau i gyllideb Cymru bob blwyddyn.

A wnaiff yr Ysgrifennydd roi rhai manylion pellach inni am safbwynt Llywodraeth Cymru ar addasu grant bloc a mynegeio, yn enwedig pa fecanweithiau penodol y mae’r Llywodraeth yn eu ffafrio; sut y mae'n bwriadu ymdrin â thwf gwahaniaethol yn y boblogaeth, mewn ffurflenni treth, mewn twf economaidd; pa weithdrefn sy'n cael ei chynnig ar gyfer sicrhau cytundeb ynglŷn â pha un a yw newid treth yn ymarferol; sut i wahaniaethu rhwng effeithiau gradd un a gradd dau; a pha broses apeliadau neu drefn datrys anghydfodau fydd ar waith os yw Llywodraethau’r DU a Chymru yn anghytuno?

Bu llawer o sôn am yr egwyddorion dim niwed a thegwch i’r trethdalwr sy'n tanlinellu fframwaith cyllidol yr Alban, ond onid yw Ysgrifennydd y Cabinet yn derbyn, yn achos Cymru, un o rannau cyfansoddol tlotaf y Deyrnas Unedig ar hyn o bryd, y dylai fod Llywodraeth y DU yn barod i ganiatáu nid egwyddor dim niwed, efallai, ond egwyddor bonws treth a fyddai’n caniatáu i ni yng Nghymru elwa’n anghymesur ar newidiadau treth fel math o bolisi rhanbarthol? Yn benodol o ran treth incwm, a fydd Ysgrifennydd y Cabinet yn gofyn am gymaint â phosibl o hyblygrwydd ar ddatganoli treth incwm, gan gynnwys y pŵer i addasu lwfansau a throthwyon a chreu bandiau newydd?

Mae'n sôn am y trafodaethau â’r Trysorlys; a allai ddweud ychydig mwy am ein sefyllfa yn y broses honno? A yw eisoes wedi cael cyfarfod ar lefel weinidogol, a sut y bydd yn bwrw ymlaen â’r broses honno dros yr haf?

Parhaodd y trafodaethau rhwng Llywodraeth yr Alban a'r Trysorlys am fframwaith cyllidol yr Alban am oddeutu 11 mis. Un feirniadaeth i'r trafodaethau hynny oedd y diffyg tryloywder. Rydych yn dweud yn eich datganiad—ac rydym yn croesawu hyn—y dylai fod gan y Cynulliad hwn y pŵer i dderbyn neu wrthod fframwaith newydd. A allwch chi hefyd roi sicrwydd inni y bydd gan y Cynulliad ddigon o gyfle i gyfrannu at y trafodaethau hynny a chraffu arnynt, a chytuno ar yr egwyddorion sylfaenol ymlaen llaw? Mae hyn yn gwbl hanfodol o ystyried ein profiad o fformiwla Barnett, a gafodd, wrth gwrs, ei chyflwyno heb ymgynghori ar ddiwedd yr 1970au, ac nad yw erioed wedi ei diwygio er gwaethaf ei hannhegwch amlwg.

I thank the Member for those comments, and I thank him for informing me that some things are very difficult to do here, but not quite like doing it in a state of war.

Cyfres o gwestiynau pwysig iawn gan Adam Price, a’n man cychwyn ni yw'r un lle y dechreuodd yntau hefyd—sef bod atebolrwydd democrataidd yn ymwneud yn gryf â bod sefydliadau sy'n gwario arian yn gyfrifol am godi arian yn ogystal. Fodd bynnag, mae cael y gyfres gywir o gytundebau i Gymru yn gwbl hanfodol. Fel arall, bydd yr egwyddor sylfaenol honno o atebolrwydd democrataidd wedi’i erydu'n angheuol os cawn ni ein dal yn gyfrifol am ganlyniadau penderfyniadau nad ydynt yn cael eu gwneud o fewn y Cynulliad Cenedlaethol hwn. Yn yr ystyr hwnnw, mae’r Aelod yn llygad ei le i ddweud bod y methodolegau a fydd yn sail i'r fframwaith cyllidol yn gwbl hanfodol, y bydd yn rhaid inni fynd i’r afael â chwestiynau fel y rhai a gafodd eu hateb yng nghytundeb yr Alban am newidiadau yn y boblogaeth a bod yn glir, fel yr wyf yn ei gredu, na allwn ni fod yn gyfrifol am newidiadau yn y boblogaeth sy'n cael eu sbarduno gan benderfyniadau nad ydynt yn perthyn yma yn y Cynulliad Cenedlaethol.

Rwy’n cytuno ag ef bod modd o adolygu’r system yn annibynnol yn bwysig iawn. Mae’r Alban wedi sicrhau adolygiad annibynnol yn 2021 i wneud yn siŵr bod y system yno’n gweithio yn y ffordd a fwriadwyd ac ni fyddwn yn disgwyl dim llai i ni yma yng Nghymru.

Cyn belled â ble y mae trafodaethau â’r Trysorlys wedi’i gyrraedd, rwyf wedi cael un drafodaeth hyd yn hyn yn uniongyrchol â Phrif Ysgrifennydd y Trysorlys. Mae gennyf gyfarfod wedi’i drefnu gydag ef ar gyfer 21 Gorffennaf ac yn fy nhrafodaeth wreiddiol ag ef, gwnaethom gytuno ei bod yn debygol, i mi, y byddem yn cyfarfod bob mis yn ystod yr hydref er mwyn cadarnhau rhai o'r manylion y bydd y fframwaith cyllidol priodol yn dibynnu arnynt. Rwy’n gobeithio na wnaiff hyn gymryd cymaint o amser ag a wnaeth yn yr Alban, ac rydym yn ffodus ein bod yn dilyn yr Alban o amgylch y llwybr hwn ac rydym wedi bod yn ffodus iawn bod ein cydweithwyr yn yr Alban wedi cydweithredu’n helaeth â ni, i’n galluogi i elwa ar eu profiad a chael rhywfaint o fewnwelediad i'r trafodaethau a ddigwyddodd.

Rwy'n meddwl bod llawer yng nghytundeb yr Alban sy'n rhoi man cychwyn da iawn i ni ar gyfer ein trafodaethau wrth i ni ddechrau arnynt yn yr hydref. Mae'n hanfodol i mi bod gan y Cynulliad Cenedlaethol gyfle i barhau i graffu ar y darlun sy'n datblygu yn y trafodaethau hynny, yn rhannol oherwydd yr hoffwn wneud yn siŵr fy mod yn gallu ateb unrhyw gwestiynau sydd gan Aelodau, ond hefyd oherwydd y pwynt a wnes i yn fy natganiad sef ein bod, yn y Cynulliad diwethaf, pan oeddem yn gallu cytuno ar rai pethau craidd pwysig a oedd yn bwysig ar draws y Cynulliad Cenedlaethol cyfan, bod hynny yna'n cryfhau ein siawns yn sylweddol o gynnal y dadleuon hynny y bydd yn rhaid i ni eu cael ar ben arall yr M4.

Cabinet Secretary, I’m pleased to see that you’re carrying on with your predecessor’s enthusiasm for the first Welsh taxes in 800 years. I suppose it’s a bit too much to expect the public to be enthusiastic about paying taxes, but at least the enthusiasm is with you with a mind on history and the thirteenth century indeed.

This does, indeed, represent a fundamental change in the devolved settlement. Firstly, I support your desire for Welsh taxes to be as simple as possible. I’m pleased that you are carrying on with the policy that taxes here should only differ from those across the border and other parts of the UK if absolutely necessary. How are you going to ensure this simplicity and what have you done to reassure stakeholders that the tax regime that develops in Wales will be as simple and straightforward as possible?

I appreciate the legislation process for taxes such as LTT will be complex; I’m sure you agree that it’s important that we get this right. You did touch on this, but what are you doing to draw on experience of tax devolution in Scotland? As you said earlier, they have made some mistakes there, such as developing the legislation for Revenue Scotland way after they started the process of developing individual taxes. They learnt a number of lessons; have you learnt those lessons—well, you clearly have, because you’ve done it the other way around—but what other lessons has the Welsh Government learnt, and, indeed, what can we teach Scotland in this area, Secretary? I’m sure that there are things there—this is a two-way process.

I’m pleased you intend to maintain a constructive relationship with HMRC. How confident are you at this early stage that HMRC will be fit for purpose in the Welsh context? Scotland, initially, were going to rely very heavily on HMRC, but as things transpired and developed, they relied on them less, and I think they gave Revenue Scotland a lot more of the role that HMRC were originally going to take because of cost reasons and efficiency reasons. Do you envisage the Welsh Revenue Authority having a similar wider responsibility in future in taking on some of that responsibility itself?

You’ve mentioned, towards the end of your statement, the fiscal framework. As you know, and as I’ve told you in the past, you have cross-party support on the development of a proper fiscal framework. I think there’s general agreement that we cannot go on as we are, particularly with the imminent devolution of these taxes to Wales.

I’ve spoken repeatedly and asked you questions about my concerns over block grant reductions in the wake of tax devolution, including income tax devolution. Can you update us, as Adam Price asked you, on any discussions with the Treasury on mechanisms of calculating the block grant reduction in the first year and, also, the options for indexing future reductions? These clearly aren’t discussions that are the talk of pubs across Wales, but these are very important to getting tax devolution right.

In terms of future reductions, firstly, how will inflation be taken into account? With the decision to leave the European Union and costlier imports, there is general consensus that there’s a risk of higher inflation over the medium term. So, the indexing for inflation becomes increasingly important, even more so than it was before. Secondly, you already mentioned the issue of population change. The Scottish Government has dealt with this and there is an agreement with Westminster that any detrimental change in population will not be borne by the Scottish proportion of income tax, but by the UK as a whole. Are you seeking similar assurances from the Treasury? I’m more than happy to make that case with you. This is a good example of where we do need to see equity across the UK. Yes, we all agree with the need for fiscal accountability and the need for Welsh Government to bear the risk associated with the fiscal decisions that you take, but you should not have to bear the risk associated with UK decisions as a whole. We need to entangle those two.

Finally, Presiding Officer, you mention the need for some kind of future mediation if the amount of money we get through the Barnett formula and fiscal framework is not what the Welsh Government feels that we should be getting. I’m casting my mind back to some of the Finance Committee evidence sessions from the last Assembly. There was a suggestion that we could develop a UK body that would deal with mediating problems like this, so that it wouldn’t be simply a case of a bilateral discussion between you and the Westminster Government. What are your thoughts, in the future, on some kind of body that could provide that mediation? Would you like to see a return to the quadrilateral discussions that your predecessor had a number of years ago, before they were replaced by bilateral discussions? I think the quadrilateral discussions, from my discussions with Jane Hutt, were very useful in moving forward.

I thank Nick Ramsay for those important questions. My starting point is the same as his. We want the system to be as understandable and simple as possible, albeit that some of these matters are inherently complex and are the province of people who are experts in the field. I believe that the journey that we are on should begin with as little difference as necessary between the system we have already and the system that we will create, while building in sufficient flexibility to our system to allow for differentiation in the future, should Welsh policy needs require us to move in that direction. In the short term, it is very important that those people who work the system day in, day out see the system that will replace it as recognisably the one that they are used to, in order to be able to go on providing a smooth service to members of the public, but we want to have, inherent in the legislation that we will bring forward, the ability for that to develop and mature.

As far as lessons that we have learned from Scotland, as I said to Adam Price, we’ve been very fortunate, I think, in the level of assistance that we’ve been afforded by colleagues in Scotland and continue to be afforded. One of the lessons that we’ve learned from Revenue Scotland underpins the decision that I published in the written statement on Friday to make the Welsh Revenue Authority the lead on the collection and management of land transaction tax and landfill disposals tax, and on compliance and enforcement of land transaction tax. A year ago, we thought that the balance of arguments was slightly in favour of allowing HMRC to go on doing that on our behalf. But, Revenue Scotland’s first-year experience, I think, gives us confidence that it’s possible for us to take on that tax more directly ourselves. I think that’s a good investment in building up the system that we will need for the future. We need to continue to have constructive relationships with HMRC in the meantime because there is expertise there that we will need to draw on. We have good offers from HMRC of seconding staff to us in Wales, in the short run, to help us build up that expertise, and a continuing dialogue with them to assist us in setting up our systems here.

Nick Ramsay has very regularly and effectively raised the whole issue of the fiscal framework on the floor of the Assembly and the need for a block grant adjustment mechanism that protects the position of Welsh taxpayers and people who rely on Welsh services. The first year is not the problem, as he implied. You simply substitute what we will have or what we would have had in subsequent years, but we have to make sure that the mechanism is robust enough to take account of inflation. I would certainly expect that we will have a similar system to that which they negotiated in Scotland on the issue of population, but there are other differences. Adam Price referred to the work of the Wales Governance Centre on the differential impact that raising the tax threshold has in Wales compared to other parts of the United Kingdom. We will have to negotiate those matters over the autumn as well.

On the issue of future mediation and the need for an impartial adjudication system, in Scotland they’ve agreed on using the Office for Budget Responsibility and the Scottish Fiscal Commission. We don’t have a commission of that sort here in Wales and I will be considering over the summer how we might mobilise a Welsh-specific form of expertise to match the independent advice that will continue to come from the OBR.

As far as the quadrilaterals are concerned, I certainly think it would be beneficial if they were revived. I’ve said that to the Chief Secretary to the Treasury already. In the meantime, I will meet finance Ministers from Scotland and Northern Ireland next week to make sure that we continue to share experience and expertise that we can collectively put to work in our negotiations with Whitehall.

I’m grateful to the Cabinet Secretary for his statement. As he says, these matters are inherently complex, and legislation is inevitably technical. This was brought home to me, at least with respect to this Assembly, should it be necessary, when seeking to familiarise myself with the procedures, at least to a degree. I watched, on the Parliament channel, his predecessor ably introducing the Tax Collection and Management (Wales) Bill—now Act—and I’m sure he will continue to undertake the role with similar ability.

I welcome, in particular, his statement that there will be no change for change’s sake, and now that he wishes to see—at least, initially—as little difference as possible between the system in Wales and the current UK system to which we are part; and a through-train approach that, at least for practitioners, I’m sure will be welcomed. I wonder whether I can ask him particularly about how that may affect the land transaction tax. He mentioned in his statement that this had been consulted on on an England and Wales basis and was currently going through the UK Parliament. Does that imply that he is happy with that approach, or may he be seeking to make changes to the applicability and basis of that tax when it is introduced expressly for Wales?

Second, I just wanted—. Towards the end of his statement he said that a sensible fiscal framework will pave the way to the introduction of Welsh rates of income tax. I was a little puzzled. He then said that he was clear that decision should continue to rest with the National Assembly. Is it not the case that, currently, that decision rests ultimately with a referendum of the Welsh people, and that he and the Conservative Government in Westminster are both seeking to change those arrangements to evade any such referendum? Well, perhaps after the decision 11 days ago of the Welsh people to vote against membership of the European Union, he isn’t so keen on referendums, but should we not at least accept that that is the current position, which he and the other Government at the UK level now seek to change?

I thank Mark Reckless for those questions. My message today about no change for change’s sake is based on the very clear message that came from stakeholders during our consultation on the land transfer tax. They were very strongly of the view that we needed a smooth transition from the existing law to the new law and that changes—and there will be changes that we will introduce—would be just the ones that are necessary while allowing the scope for greater changes in the future.

What I said in my statement—I apologise if I didn’t make this quite clear enough—was that, since we consulted on our land transaction tax proposals, there have been changes in Scotland and at the UK level that weren’t known at the time of the consultation, and I drew attention in particular to the additional rate on second homes, which only became part of the Scottish and UK landscape after our consultation had closed. I think Mr Reckless asked me whether that was a policy that I supported. Let me say that it’s a policy that I find attractive, but which we have to consult on. And so, I’m not coming to a conclusion until we’ve had the consultation, and I tried to say in my statement that we will publish a document for consultation over this summer, and then I’ll come before the National Assembly with conclusions once we’ve had the benefit of that.

As to Welsh rates of income tax, I was referring to the proposed change in the Wales Bill and simply trying to make the point that if there is to be no referendum, there needs to be some substitute mechanism for that, and, for me, that is that no transfer of income tax responsibility should be made to this National Assembly without this National Assembly’s explicit agreement.

Taxation exists to pay for public services. It’s very important if we are to have high-quality public services that we have a taxation system that works. It’s not there primarily as a means of economic development; it’s there to get money for services that we all rely on.

The two taxes proposed to be devolved on 1 April 2018 raise limited income. The policy intention is to continue to reduce landfill, and thus landfill disposals tax, by increasing recycling. In fact, the Government would probably consider it a success if landfill tax brought in no money whatsoever. While land transaction tax is highly volatile and cyclical, the amount of tax raised is small enough not to materially affect the Welsh Government’s expenditure. It will, however, be critical to get a fair deal on this tax to ensure no detriment and to set the principles for any future taxation that is devolved.

I agree with Nick Ramsay about the importance of mediation. If I could just mention the money we didn’t get from the London Olympics, the Treasury acted as judge and jury, and we got roughly the same amount of money that I believe we should have got for Swansea, never mind for the whole of Wales.

I am nervous on the devolution of income tax. We know that it fell by £400 million between 2007-08 and 2009-10. Even the biggest critics of the Welsh Government probably wouldn’t blame the Welsh Government for that fall, yet, if income tax were devolved, they would take the hit. Any change to the way that Wales is funded should give protection against reductions caused by actions outside the control of the Welsh Government and the Welsh Assembly. There must be ‘no detriment’ written in there, and not for the short term, but for ever.

I have a question. If you think specifically back to Silk, there was talk about the devolution of the aggregate levy. That’s something that seems to have been on the back burner for a long time. It’s not a particularly large sum of money, but I think it is a tax that is easily, I hope, devolved. Can the Minister give any further information on the devolution of the aggregate levy? And will the Minister commit to make keeping the funding floor the key aspect of any negotiations, so that we have it if the amount of money coming into Wales goes up, or if the money that has been spent goes up, so that it’s not just there when the money is going down, and to ensure that ‘no detriment’ is written into the whole system, so that we don’t lose out? Will the Minister continue to push for some form of mediation; someone to adjudicate between the Welsh Government and the Treasury? I don’t know if I’m allowed to say this, but I don’t trust the Treasury to be fair. [Assembly Members: ‘Oh.]

Member of the Senedd:

Controversial. [Laughter.]

Controversial—yes, indeed. Mike Hedges is right, of course, that the purpose of raising taxes is to pay for public services. We also try our best to align taxation in a way that promotes objectives of public policy, and that’s why we have a landfill disposals tax. There is some inherent volatility in these taxes. The best estimates prior to 23 June were that they would raise around £300 million a year, so it’s not an insignificant sum, and, if we didn’t have it, we would certainly feel the effect of it in our public services. That’s why the ‘no detriment’ principle is so important in the negotiations.

On aggregates levy, we continue to be in discussions with the UK Government on that matter, but I think the broader points that Mike Hedges made are very important, that our discussions with the Treasury are not narrowly focused on these two pieces of legislation. They have to be part of that bigger pattern of negotiations in which the funding floor, securing that as a permanent part of the landscape—borrowing limits, which I mentioned in my statement, are part of that wider landscape too, and, while we concentrated this afternoon, and we’ll be taking through the National Assembly in the autumn, these two very important pieces of legislation, our discussions with the Treasury are on a broader canvas than that.

Like the earlier speakers, I think we need to move with caution on this, not least because, as you say in your statement, every tax we get, every power we get devolved, appears to lead to a similar reduction in the amount of the block grant, and that could actually lead to a greater burden on Wales than we currently get from the mildly redistributive system that we have, even if it’s not perfect. So, I think we need to avoid perverse incentives, and, obviously, the landfill disposals tax does that, but it can also be used to tackle perverse consequences. I was struck by the intention of San Francisco to levy a very modest 1.5 per cent payroll tax on the high-tech companies—global companies like Google, Amazon and Uber, not known for their enthusiasm for paying taxes anywhere in the world. But, if successful, that money could be used to provide affordable housing for low-income families who’ve been displaced by these very same successful tech companies who have made it impossible for people to go on living in the city.

So, I think we have to realise that, if the austerity policies of the UK Government continue, there will continue to be pressure on us to find new ways of boosting the public sector revenue, particularly if we see a reduction in public sector grants coming from central Government. So, do we have the powers in the future, were we so minded, to adjust the land transaction tax to become a land value tax, which might more adequately reflect the good fortune of those who benefit from well-connected communities and excellent services to pay more as a vehicle for reversing the well-known inverse care law, as well as tax avoidance? Perhaps you could give us some indication of the direction of travel that the Government might be suggesting we move in.

Thank you, Jenny Rathbone, for those questions. She’s right to begin by warning us of perversities and unintended consequences that can flow from even the best motivated policies. But I do continue to believe that the basic principle that any tier of government that expends public money should also be responsible for raising part of that money is the right one. And then we have to work hard to make sure that we do it in the correct way. I thank the Member for Cardiff Central for referring to the San Francisco experience, which I don’t know enough about, but will look forward to learning more about that.

I think she points to another of these wider contextual matters that Mike Hedges raised, which is that, alongside all of this, if the Wales Bill succeeds, then this National Assembly will have new powers to propose new taxes here in Wales. And the recent Bevan Commission report rehearsed land value taxation as one of a number of possibilities that could be tested in that new regime. Personally, I have long been something of an enthusiast for land value taxation. What I do feel is that, if those new powers come to Wales, it will be important for us to think through together some examples of new taxes that we might be able to propose in order to test out the new machinery that the Wales Bill envisages and to see the best way in which we could use those new powers for the benefit of individuals and services in Wales.

May I welcome the Cabinet Secretary’s statement and, particularly, his comments on the fiscal framework, and the commitment that this Senedd will have an opportunity to discuss and to agree or otherwise the framework in due course? In looking at the agreement between the UK Government and the Scottish Government, it is clear that it’s the result of a great deal of work, and I’m pleased to hear that you’ve had some collaboration in relation to that for our arrangements. But it doesn’t have the impact of legislation. Does he agree with me that a statutory basis to the fiscal framework would provide greater guarantees to Wales in terms of a commitment to adequate funding and the broad principles that underpin that commitment, and a mechanism to dealing with any dispute or disagreement, should one arise?

Thank you very much to Jenny Miles. Just to say, I was eager to appear before the Assembly before the summer with a statement, just to have an opportunity to discuss things together and provide an update to Assembly Members. On the experience in Scotland, it’s on the agenda for the meeting I have next week with the Minister from Scotland to press ahead with those discussions that we’ve had with them and to learn from the experiences that they’ve had. The best way to be clear that in our hands, and in the hands of the National Assembly, is where the final choice rests to accept the framework and to be content with the framework—that’s vital. The best way to do that—well, that’ll be part of the process that we’re going to have in the autumn of discussing everything with the Treasury Secretary in London.

Thank you, Cabinet Secretary.