6. 5. Statement: Tax Devolution and the Fiscal Framework

Part of the debate – in the Senedd at 3:30 pm on 5 July 2016.

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Photo of Mark Drakeford Mark Drakeford Labour 3:30, 5 July 2016

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.