Item 3 on the agenda is a statement by the Cabinet Secretary for Finance and Local Government on the Landfill Disposals Tax (Wales) Bill, and I call on Mark Drakeford to speak to the statement.

The introduction of the Landfill Disposals Tax (Wales) Bill marks another step forward in our tax devolution journey. It’s the second of two taxes that are being devolved to Wales. This follows the introduction of the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Bill, introduced in September, and the passage of the Tax Collection and Management (Wales) Act, passed earlier this year. The devolution of taxes to Wales will enable us to develop a tax system that is simpler and fairer for taxpayers and that supports our ambitions for public services, jobs and growth. For the first time in 800 years, we are developing and implementing a tax regime that is more directly suited to the circumstances and people of Wales. We have consulted widely with stakeholders throughout the development of this Bill, and I would like to thank all those who have contributed. I value their continued involvement in informing the ongoing and detailed work to come.

Bydd y Bil hwn yn sefydlu treth newydd ar warediadau gwastraff i safleoedd tirlenwi, a fydd yn disodli'r dreth dirlenwi bresennol, sy'n cael ei chodi ar sail Cymru a Lloegr, o fis Ebrill 2018 ymlaen. Bwriad y dreth yw sicrhau bod y refeniw o dreth dirlenwi’n parhau i gael ei gasglu i’w fuddsoddi mewn gwasanaethau cyhoeddus yng Nghymru. Ond nid dim ond mater o gasglu treth yw hwn, oherwydd mae’r Bil hwn yn cyd-fynd â'n polisi gwastraff. Bydd y dreth gwarediadau tirlenwi’n chwarae rhan bwysig wrth ein helpu i gyflawni ein nod o greu Cymru ddiwastraff. Bydd yn parhau i sicrhau bod cost amgylcheddol rhoi gwastraff mewn safleoedd tirlenwi yn cael ei nodi a’i bod yn weladwy ac, wrth wneud hynny, bydd yn annog mwy o atal, ailddefnyddio, ailgylchu ac adennill gwastraff.

Trof yn awr at fanylion y Bil a'i gynnwys. Mae Rhan 2 yn cynnwys diffiniad o warediadau trethadwy ac o dan ba amgylchiadau y gallent fod wedi’u heithrio rhag treth. Mae Rhan 3 yn nodi'r trefniadau ar gyfer gwarediadau trethadwy a wneir mewn safleoedd tirlenwi awdurdodedig, megis rhwymedigaeth i dalu, cyfrifo treth, dyletswydd i gofrestru ag Awdurdod Cyllid Cymru a sut i roi cyfrif am y dreth, gan gynnwys gostyngiadau. Mae Rhan 4 yn darparu’r trefniadau ar gyfer gwarediadau trethadwy a wneir mewn mannau heblaw safleoedd tirlenwi awdurdodedig, ac mae Rhan 5 yn gwneud darpariaeth atodol ar gyfer credydau, mannau nad ydynt at ddibenion gwaredu, ymchwilio a rhannu gwybodaeth ac yn nodi trefniadau ynglŷn â phersonau, grwpiau, partneriaethau a chyrff anghorfforedig.

Un o negeseuon clir yr ymgynghori fu’r angen i drosglwyddo’n llyfn at dreth gwarediadau tirlenwi ym mis Ebrill 2018. Mae hyn wedi bod yn flaenoriaeth i’r Llywodraeth wrth lunio'r Bil sydd ger eich bron. O ganlyniad, bydd y dreth newydd yn gymharol gyson â'r dreth dirlenwi bresennol—bydd prosesau treth a’r agwedd tuag at gyfraddau treth yn debyg, a bydd hynny’n darparu sefydlogrwydd a sicrwydd i fusnesau ac yn lleihau'r risg o dwristiaeth gwastraff. Fodd bynnag, mewn ymateb i safbwyntiau rhanddeiliaid, mae'r ddeddfwriaeth hon yn gliriach ac yn symlach i’w defnyddio; mae'n adlewyrchu arferion sefydledig, mae'n gyfredol ac mae'n berthnasol i Gymru. Lle bo’r dreth dirlenwi bresennol yn cynnwys amwysedd, rydym wedi ceisio rhoi eglurder.

Yn y cyd-destun hwnnw, Ddirprwy Lywydd, dewch imi hefyd fod yn glir: bydd angen i bawb sydd â gwastraff i’w waredu gydymffurfio â’r dreth hon yn llwyr ac yn briodol. Bydd y Llywodraeth hon yn cymryd ymagwedd gadarn at gydymffurfio a gorfodi. Bydd Cyfoeth Naturiol Cymru yn gweithio gydag Awdurdod Cyllid Cymru i ymgymryd â swyddogaethau cydymffurfio a gorfodi ar gyfer treth gwarediadau tir. Bydd hyn yn sicrhau bod Awdurdod Cyllid Cymru yn elwa ar brofiad a gwybodaeth Cyfoeth Naturiol Cymru ym maes tirlenwi a’r perthnasoedd y maent wedi’u sefydlu â gweithredwyr safleoedd tirlenwi. Bydd y Bil yn galluogi Awdurdod Cyllid Cymru i godi treth ar warediadau gwastraff heb awdurdod, gan gau llwybr posibl i osgoi talu treth, a sicrhau tegwch cyffredinol i fusnesau gwastraff cyfreithlon. Bydd hyn yn ei gwneud yn fwy beichus yn ariannol i wneud gwarediadau heb awdurdod, ac yn newid y cydbwysedd o blaid gwaredu mewn safle tirlenwi awdurdodedig.

Cyflwynwyd treth ar warediadau heb awdurdod yn rhan o dreth dirlenwi yr Alban, ac mae wedi bod yn un o nodweddion ardoll dirlenwi Gweriniaeth Iwerddon am y 10 mlynedd diwethaf. Mae rhanddeiliaid yng Nghymru wedi rhoi croeso cynnes i’r penderfyniad i gynnwys rhywfaint o ddarpariaeth yn y Bil hwn. Bydd y ddeddfwriaeth yn sicrhau bod y broses yn dryloyw, yn gymesur ac yn ymarferol. Mae'r cynigion wedi'u datblygu i gydblethu â rheoliadau amgylcheddol presennol, fel y byddant yn gweithio ochr yn ochr â'i gilydd.

Mae Deddf Casglu a Rheoli Trethi (Cymru) 2016 yn darparu pwerau cyffredinol i Awdurdod Cyllid Cymru i gynnal ymchwiliadau troseddol ac erlyniadau sy’n ymwneud ag osgoi talu treth. Bydd Llywodraeth Cymru yn ymgynghori ynghylch cryfder y pwerau hyn a sut i’w defnyddio yn gynnar y flwyddyn nesaf, er mwyn sicrhau eu bod yn darparu ataliad effeithiol ond cymesur.

Yn olaf, Ddirprwy Lywydd, defnyddir rhywfaint o’r cyllid a godir o'r dreth gwarediadau tirlenwi i gefnogi prosiectau amgylcheddol a chymunedol yn yr ardaloedd hynny yr effeithir arnynt gan waredu gwastraff mewn safleoedd tirlenwi. Caiff hyn ei gyflawni drwy gynllun grant cymunedau’r dreth gwarediadau tirlenwi, gan ddefnyddio pwerau o dan Ddeddf Llywodraeth Cymru 2006. Dosberthir y cyllid i brosiectau sy'n cefnogi bioamrywiaeth, ymdrechion i leihau gwastraff a gwelliannau amgylcheddol eraill er budd y cymunedau hynny.

Bydd ymarfer caffael yn cael ei lansio ar ôl y Nadolig i benodi trydydd parti i ddosbarthu cyllid yn uniongyrchol i brosiectau. Bydd y dull hwn yn sicrhau bod cymunedau’n cael cymaint â phosibl o arian. Cyhoeddir papur i roi manylion pellach am ddatblygu’r cynllun cymunedol hwn cyn y Nadolig a chyn i’r Pwyllgor Cyllid ystyried y Bil. Byddaf, wrth gwrs, yn rhoi diweddariadau pellach wrth i'r Bil fynd ar ei daith drwy'r Cynulliad Cenedlaethol.

Deputy Presiding Officer, the Landfill Disposals Tax (Wales) Bill has been developed to provide clarity for taxpayers and the Welsh Revenue Authority and to ensure there is flexibility to accommodate future policy developments. I look forward to the scrutiny process and to hear from individuals and organisations within this Chamber and beyond. I’m sure that they will be interested in ensuring that this is Bill is a success.

I thank the Cabinet Secretary for this statement on the Landfill Disposals Tax (Wales) Bill. You wait for one Welsh tax for over 700 years, and then two come along at once—funding vehicles both arriving together. We are very grateful for the opportunity, of course. This tax doesn’t raise as much in revenue as the land transaction tax—indeed, the hope is that the revenue will reduce. But this tax does provide important possibilities in securing that goal of creating a waste-free Wales.

Of course, the Government’s aim, as I understand it at present, is to see a waste-free Wales by the middle of this century. Plaid Cymru had set a target of achieving a waste-free Wales by the year 2030, which is an ambitious aim, of course, but Bhutan have also set that as their target, and even New York has done the same. I would ask the Cabinet Secretary to what extent this new tool—this new power to tax—is a means for us to reassess that target. I understand the rationale that you would want to be relatively consistent in terms of the tax framework as compared to England, and we don’t, of course, want to see this ugly phrase, or an even uglier activity, namely waste tourism, happening across our borders. To what extent can we be a little more creative and innovative in thinking how this taxation power enables us to achieve this target of a waste-free Wales more swiftly?

As the Cabinet Secretary explained, of course, this Bill also introduces unauthorised waste disposal—fly-tipping and so on—within the remit of the taxation. That’s an example of the kind of innovation that’s possible, and that’s very much to be welcomed. The explanatory documents note that the Welsh Revenue Authority will be responsible for collecting and managing the tax, along with NRW. This, again, is an innovation—to see these two organisations jointly managing this. Could he tell us a little more about how this will actually work in terms of unauthorised disposals? For example, what expectation will there be on NRW to oversee unauthorised waste disposals regularly, and if so, has the Government considered whether there will be any additional costs for NRW in relation to this? Can we be given some assurance that sufficient resources will be available, so that this new responsibility doesn’t become onerous?

Can I thank the Member for his broad welcome for the Bill and its purposes? He made some important points at the beginning about the alignment between taxes that are coming to Wales and our policy agenda. This has been a very successful tax as far as changing behaviour is concerned. The total tonnage of waste in Wales going to landfill fell by 52 per cent between 2001 and 2013. The Office for Budget Responsibility in its autumn statement predicted that take from this tax will reduce more rapidly than it had earlier in the year and that is part of the alignment between the policy agenda and the tax agenda.

Our aim, as he said, is to begin this tax with as close a replication of existing arrangements as we can while improving them. I have no doubt that as these powers come practically into operation, the ability to revisit our ambitions in this area, and see whether there’s more that we could make of this new lever, will be something that Ministers will want to consider at that time.

The Member asked questions about the relationship between the WRA and Natural Resources Wales. The decision to ask Natural Resources Wales to undertake the enforcement aspect of this tax is because of its presence already in the waste field—the fact that it is possessed of information about how it operates on the ground and to put that to best use.

We are already providing some additional funding to NRW in order to allow it to prepare for these new duties. We will see whether it is necessary to go on doing that in future in that way. I am certainly open to discussions as the Bill proceeds as to some revenue-sharing arrangements. If Natural Resources Wales is able, by bearing down on illegal waste sites, to increase the flow of revenue into the WRA, it does not seem unreasonable to me that they should not be allowed to keep a share of that additional revenue in order to promote it to do more work in this area. I look forward to discussing that possibility as the Bill moves through the process of scrutiny.

Thank you very much. David Melding.

Thank you, Deputy Presiding Officer. Can I also thank the Cabinet Secretary for his statement, and also the courtesy of giving us the statement, or sight of the statement, a good few hours in advance—that’s very helpful? I’d like to start with areas where I think there is going to be agreement all around the Assembly. I think the goal of zero waste and a circular economy is an important one, an ambitious one, and as we heard from Adam Price, it’s one shared by many other countries now, both in the developed—well, what used to be called the developing world; I’m not sure if it’s quite correct to put in those terms now. But this really is an important part of, I think, many tax instruments now, but, obviously, particularly one such as the landfill disposals tax.

I note the intention to make the legislation simpler and clearer. I can’t judge whether it is, and I think that will now be for the full scrutiny process, but at least that’s your aim, and, having said it, you will now be scrutinised on whether you’re achieving it. But it’s not a trite point. I do believe legislation, even tax legislation, has to be drafted in as simple and as clear a way as possible. That doesn’t make it bedtime reading, I realise, but, still, it shouldn’t be needlessly obscure.

We particularly welcome the landfill disposals tax communities grant scheme, and the aim of helping environmentally focused projects is, of course, appropriate. I also think it’s entirely appropriate that those communities that have important infrastructure for the local, regional and national economy get the direct benefit of some payback from that, and that’s something that we warmly support.

Can I turn to my slightly more sceptical points, but I hope I still achieve my aim of being constructive? The Cabinet Secretary says that the Welsh Government will take a robust approach to compliance and enforcement. Actually, you emphasised those points in your oral statement, and the focus will be particularly on unauthorised disposals of waste. And I’m sure the public will say, ‘Hurrah’, but they’ll also want to know how, and I’m not sure you fully answered the points put to you by Adam Price.

The record on fly-tipping is not great. Now, I realise that that principally lies also with local authorities. But I have to say, I think the gap this afternoon has been on quite how Natural Resources Wales is going to co-operate with local authorities to improve enforcement—it’s one thing the tax revenue authority, but it will still be essential for local authorities to be there as part of the intelligence gathering and compliance operation. And I just wonder if you really do want to see an improvement in enforcement, not only for the direct benefit of the Exchequer, as it were, but also for the improvement of the quality of life for many people in areas that are currently despoiled with irresponsible fly-tipping. So, I think you perhaps need to consider that, because enforcement is, obviously, quite a challenge sometimes—fly-tipping is hardly done in the open and in the daylight, and it’s one thing to say they’ll now be subject to the tax, because, of course, they’ve got to be caught first.

Thank you very much to David Melding for those questions. He’s right to point out that this is in an unusual tax, in that it has, at its heart, an ambition to put itself out of business, and it’s succeeding in doing that. I think there is genuine scope for making the law simpler and clearer. The original landfill tax was the product of the early 1990s. It has grown up since then, through a mixture of primary and secondary legislation, guidance, Schedules—it’s one of those taxes that has accreted in a number of different places, and we are able to bring it together in a single new Bill for Wales.

I thank him for what he said on the communities scheme. It’s a very important part of this landscape. We’re going to take a different approach to it. We do think we can genuinely do this in a more streamlined and effective way, and we can cut down on the costs of administration. And given the fact that this is a declining tax, and therefore the money available for community purposes is declining as well, we want to make sure that we maximise the take that we can get from this tax for those purposes.

Let me turn to the issue of unauthorised disposals and compliance and enforcement. Compliance and enforcement is a particular issue in relation to this tax. The tax gap in landfill tax—the gap between what the tax should raise and what it does raise—is 12 per cent. In stamp duty land tax—the other tax that we will inherit—it’s 1 per cent. So, there is a genuine enforcement issue to be tackled in relation to this tax, and our decisions to include unauthorised disposals within the scope of the Bill follows the experience already in Scotland and elsewhere. The parts of the Bill that deal with this matter are serious parts of the Bill. It will rest on two rebuttable propositions: that a person controlling or in a position to control a motor vehicle or trailer, or an owner, lessee or occupier of land where unauthorised disposal of waste is made, will be treated as having knowingly caused or permitted a disposal. That’s how the Bill will shape this part of its intentions. Now, those propositions can be rebutted, and the explanatory notes show how that can be done. But we think it genuinely will change the terms of trade in this area so that the calculation that somebody makes will be different in the future.

As far as fly-tipping is concerned, there is no legal definition of fly-tipping, but the sort of small-scale fly-tipping that causes such a nuisance in urban areas, for example, is not the focus of this Bill primarily. We are focused on those 60 illegal sites that exist in Wales where it is organised, intentional and deliberate behaviour, rather than small-scale attempts to evade small amounts of taxes. The other aspects are dealt with by my colleague Lesley Griffiths, where the Government has taken different sorts of measures to strengthen the hands of local authorities, in the way that Mr Melding suggested, to deal with that aspect of illegal waste activity.

First, can I welcome the statement by the Cabinet Secretary? The landfill disposals tax in itself is a very unusual tax, isn’t it? The primary reason for most taxes is to raise money for public services. The aim of this tax is to effect behaviour. Can I just say that when the original tax was introduced, I was sceptical? It was an attempt to effect behaviour by proxy. It was councils that were being charged for the disposal, but it was the action of residents that affected the amount of landfill. It has, however, worked extremely well and has effected behaviour. The current Bill will be successful if no tax becomes payable. I don’t think we’ve ever said that about a tax before; I’m sure the Cabinet Secretary will not be saying that about the land transaction tax—‘It will be successful if no tax is paid.’ So, I think it really is about changing behaviour.

Can I just say that a range of a tax to be paid on things that are dumped other than an authorised landfill tax is a major move in the right direction? I know that fly-tipping being dealt with is difficult. People tend to fly-tip in the most difficult places to catch them. They don’t do it in a way that would make it easy for them to be caught. I know local authorities work very hard at dealing with fly-tipping, and it is difficult, but we’re not talking here about fly-tipping, we’re talking about some people who run illegal sites. They’ve done it very successfully, financially, for several years in some cases. They get fined, but they don’t get charged the amount they would have been if they were paying tax on it as well. I think that that will act as a complete dissuader to people because they’ll be paying the tax and they will be fined, in which case it will not be in their best interests to do it. So, I think that will, again, change behaviour. If, for every method of tax evasion, that is closed down, I for one feel happy.

I’ve got two questions. One is that varying the tax rate differently to that currently charged on the other side of the border will have one of two effects: it will either make us a net importer or a net exporter of our landfill. So, there is pressure to keep it at roughly the same amount as it is in England. So many landfill sites are so close to the border. So much is moving fairly close to the border. But there is that danger. So, the pressure is to keep it virtually the same.

The second one is—and this is a plea, as the local Assembly Member—on the community grants scheme. It’s very important and very useful, but when it's being given to people five miles away who are totally unaffected by it, and the people who are living on its doorstep are not getting anything, it does cause some upset. So, can priority be given to those who are closest to the landfill? We have landfill in St Thomas in Swansea, and yet places in the leafy suburbs—not represented by me, I hasten to add—are getting the benefit of it, and I think that really is something that does cause concern. So, would it be possible to give priority to locals, i.e. those who are being affected by the lorries and those who are affected by any dust or flies?

I thank Mike Hedges for both those questions. Of course, I recognise the point he makes about the border and sensitivity to different rates on either side of it. I will not be declaring my hand in relation to tax rates in this Bill until the autumn of next year. I notice that, in Scotland, where my colleague there has had to do this already, the decision was to set identical rates with those across the border and, no doubt, that reflected the arguments that the Member has just made. He will have noticed, I know, that as far as illegal waste is concerned, the Bill provides the power to set a separate rate of tax on illegal waste deposits, and I will be thinking hard about what that rate might be and how it might need to reflect the costs of pursuing those people who, in the end, will be obliged to pay it.

In relation to the community grant scheme, this issue of the mileage around the site and who should benefit from it has been one of the more lively debates in the consultation that we’ve carried out with stakeholders about our idea here. I said in my statement that I will be publishing a paper on the communities fund in advance of my appearance before the Finance Committee on 15 December, and I will certainly be reflecting on that issue in that paper.

I thank the Cabinet Secretary for his statement. I note him saying that this new tax will be broadly consistent with the existing landfill tax, which will provide stability and reassurance to businesses and minimise the risk of waste tourism. I wasn't familiar with that final concept before today, but I welcome the overall approach. It's a similar approach to what he has shown in the land transactions tax Bill, which I've enjoyed getting to grips with in the Finance Committee. I think David Melding said that the Bill would not be bedtime reading—perhaps we could extend an invitation to join the Finance Committee where, given the recent size of committee papers, that has intruded quite deep into the evenings of members. [Interruption.] Well, the sort of approach my party has taken to tax devolution is: both the tax he makes a statement about today and land transaction tax were in the St David’s Day agreement and we accepted that as what we would hope would be the devolution settlement. We’re perhaps less optimistic it will be any sort of settlement now, but we do support this tax as well as the land transactions tax. Our concern is with the devolution of income tax without the referendum that was promised, or the perception in some quarters that this second tax will be just one of a further series that will be buses quickly following on, which we would have concerns about.

The arrangement that he's going to have in this tax, which is not there in the current UK, or at least the England-and-Wales version, of the tax, applying to illegal or at least unregistered disposal of waste—. Can he say whether the intention there is to make enforcement more effective through, potentially, a lower standard of proof—I assume on the balance of probabilities for assessing whether the tax is required—and can that help compared to the current criminal sanctions?

I wonder whether I could also ask him—. I understand he doesn't want to talk about what rate he’s planning to set that at until at least next autumn, but I wonder if he could say a bit more about the overall emphasis he wants to give to this tax in the battery of measures that are available. We have the percentage targets for recycling, and these have been quite blunt measures. The case of Newport comes to mind, and it’s my region, where the overall recycling rate is low, but at least almost all that recycling is actually recycled, whereas a proportion of the higher recycling rates of some other authorities actually doesn’t get recycled. That doesn’t really seem to get picked up in that measure, but this tax might bite on it. Does he intend to use it in that sense?

Second, going back to the ugly phrase of ‘waste tourism’, what does he really mean by that? There is clearly availability of sites within Wales, and availability of landfill sites in England, and there are varying productions from different centres, or rubbish that needs to be disposed of potentially in that way. Is he saying that he doesn’t want to see any waste coming in from England to Wales, or he doesn’t want to see more waste going from England to Wales than currently? Is he considering potentially setting a higher rate in order to discourage what he might call waste tourism, or does he see any financial benefit to him as a Cabinet Secretary raising this finance? Were he to set a lower rate, does he believe that would lead to an increase in the revenue coming in, because of such so-called waste tourism?

I thank the Member for those questions. To address the last one first, ‘waste tourism’ is an inelegant phrase. It’s used to cover the circumstances that Mike Hedges referred to. The research shows that people taking waste to landfill are relatively sensitive to relatively small changes in the rate of tax to be paid. What I’m keen to avoid is waste being taken on long journeys to more distant places than it otherwise would have been by creating disincentives in the tax system, or incentives in the tax system. So, my aim will be not to introduce a new factor into the calculations that people currently make as to where they dispose of landfill waste. I would not want to see our tax system creating a whole different set of environmental difficulties, and we’ll be very alert to that.

The Member asked what the key policy drivers behind the Bill turn out to be. Although this is a diminishing tax as far as the Bill is concerned, it still was intended to raise £40 million in a year, and, as finance Minister, I haven’t got £40 million to fill the hole that would be left if we didn’t take action to raise that money here in Wales. So, there is an important purpose behind the Bill in securing revenue for public services in Wales, but there is at the same time that very important alignment with environmental policy, where our policy is, as quickly as we are able to do it, to reduce and then eliminate the use of landfill for waste disposal.

Finally, the question that the Member asked about unauthorised disposals, and the balance of proof that will be used in this area. The WRA already will have civil powers of investigation as part of any tax inquiry , but I signalled in my statement my intention to consult in the spring on the criminal powers of investigation that the Tax Collection and Management (Wales) Act 2016 enables Welsh Ministers to confer on the Welsh Revenue Authority. This is to be done through secondary legislation. I think we need to take a proportionate approach in that, but it will be my intention to bring proposals in front of the National Assembly for scrutiny.

Can I just remind the next speakers now that we’ve had the main speakers in your parties, and so this is a statement and not an opportunity for a speech? Simon Thomas.

Thank you, Deputy Presiding Officer. May we start by putting out a shout out of thanks to John Selwyn Gummer, who introduced the landfill tax in the first place 20 years ago, and recognise that this emerges from the EU’s landfill directive, or the European Community’s landfill directive? There has been a direct benefit to the environment of Wales as a direct result of that. This is the first environmental tax we had in Britain.

I have some specific questions for the Minister. First of all, can he just confirm—I think it’s implicit in what he said—that he isn’t using this Bill to change the environmental policy, and that he is changing the taxation system but there is no intention to change the environmental policy? I think it is implicit in what he said, but I think that needs to be said on the record, as it were.

The second question is on the communities grant. There is a great deal of interest from local communities in this grant scheme, of course. Can the Minister explain why he hasn’t placed the grant scheme in the Bill? Why is he using the Government of Wales Act 2006 instead? To me, it suggests that the Government could withdraw the grant scheme at some point in the future if they so wished, while placing it in the Bill would give the grant scheme a long-term legal and statutory status.

This question of unauthorised waste disposals: can we just be clear that it is not the intention to replace the need to punish or fine companies that undertake this activity, but that it is another way of dealing with it? As the landfill tax at present is actually levied on the operator’s site, how is it going to work by levying the tax on that person who is moving the waste? Those are two different things, aren’t they? You have two different ways of levying the tax now, rather than the simple approach that we had in the past. In light of that, will the Cabinet Secretary, as he is also the Cabinet Secretary for Finance, confirm that Natural Resources Wales has sufficient resources to tackle this problem of unauthorised waste disposals? Many of us would fear that NRW hasn’t quite got to grips with its current responsibilities, never mind having to deal with additional responsibilities.

Thank you very much to Simon for those questions. I can confirm to begin with that there is no intention to change the policy in this area. If we can get the policy to do more, then that would be a good thing, but there is no change in the intention. On the community scheme, we are going to do it like this because it is simpler. We don’t have to use the powers in the new Bill because we have the powers already in the 2006 Act. We think that, for the money that we have for this scheme, it is just simpler to do it in the way that we are going to suggest, and this will be a way of putting more money into the hands of people running these projects in the community. I answered the question from Adam Price on resources to NRW. They have resources already to prepare for these new responsibilities that they are going to have, and I am happy to keep that under review.

O ran mater y gwarediadau gwastraff anghyfreithlon a phwy fydd yn gyfrifol am dalu'r dreth, mae'r Bil wedi’i lunio’n ofalus i wneud yn siŵr ein bod yn gallu dal yn gyfrifol y sawl sydd wir yn gyfrifol am y gweithgareddau anghyfreithlon. Rwy'n ymwybodol iawn bod llawer o dirfeddianwyr yn ddioddefwyr yn y maes hwn. Nid ydynt wedi caniatáu i wastraff gael ei waredu’n anghyfreithlon ar eu tir yn fodlon ac yn fwriadol. Felly, mae angen gwahaniaethu rhwng gwahanol chwaraewyr sydd y gellir yn briodol eu dal yn gyfrifol am hyn, a dyna pam mae’r agwedd honno ar y Bil hwn yn wahanol i'r trefniadau gwarediadau tir cyfreithiol ac awdurdodedig lle mae'r dreth anuniongyrchol, fel y gwyddoch, yn cael ei gosod ar y gweithredwr sy'n casglu'r arian gan y rhai sy'n defnyddio'r cyfleusterau, a dyna pam mae angen inni ei wneud yn wahanol ar gyfer gwastraff anghyfreithlon.

Thank you, Minister, I welcome your statement but, I have to say, a mention of a new tax to Wales on disposals of waste to landfill could certainly set some alarm bells ringing in my constituency, given the direct correlation between their weekly or, what are now in some areas, monthly bin collections and the levels of council tax in Wales under a Welsh Labour Government. Of course, you will be aware that, in Conwy, there is the first pilot scheme of four-weekly bin collections across a large number of properties. The impact that this is having on our residents is really bad and many are feeling now that they cannot cope. Last week, ‘Week in, Week Out: Keeping a Lid On It’ highlighted the many problems associated with this. Yet, when some household bins were checked before collection, a large percentage of their rubbish could, in fact, actually be recycled. Now, despite, as has been mentioned, the high recycling targets set by Welsh Government, and despite local authorities providing expensive recycling facilities and receptacles, there is still this huge mismatch between domestic waste and other items that, ultimately, end up in landfill sites.

Are you coming to a question, please?

Sorry?

Are you coming to a question, please?

We have got 60 minutes for this debate.

I asked you to come to a question, please. I’m asking you to come to a question, please.

Okay. I do have a couple of questions related to your statement.

Well, hurry up then. A question, I said, but carry on. Go on, carry on.

Firstly, I’d like to ask about enforcement. We know that prosecution rates for fly-tipping are notoriously low in Wales. There was just a 0.3 per cent successful prosecution rate across the country. The Cabinet Secretary mentioned urban areas when it comes to fly-tipping, but I can tell you, in Aberconwy, there are many picturesque, rural tourism sites that are very, very badly impacted by this. So, my question is: can you explain how this tax, particularly in regard to Part 4, unauthorised sites, will actually be enforced? How will you use this Bill to actually make it very difficult, if you like, for people to be able to blight our countryside? Because, if you’ve got a Bill coming through, you’ve got to be able to use this lever and tools within that to actually bring some improvement.

Secondly, you note that some of the revenue raised will go towards environmental and community projects in areas affected by waste disposal and landfill, and I have to say I really welcome this part of it, because you’ll be aware of the Wales recycling environmental network, and I have to say that scheme has been fantastic. My own constituency has benefited from that, and so, really, this is putting back into the community and it’s actually, hopefully, going to impact on those who decide to break the law and will help communities, in the main. Thank you.

I thank the Member for what she said at the end of her contribution in relation to community projects, and the work of WRAP. I look forward to being able to share with all Members of the National Assembly the paper that I will produce on the community fund, and I completely appreciate that almost all Members here will have had some experience of it in their own constituencies and I’m very keen to learn from that experience to make sure that we design that scheme in the most effective way possible.

On the points that the Member made about enforcement, I tried my best earlier on to distinguish between the sorts of activities that she described, which I absolutely recognise from my own experience cause huge nuisance and distress to people who are affected by them, and the large-scale, organised illegal activity that this Bill is designed to tackle. There will be an overlap between the activities that my colleague, Lesley Griffiths, has responsibility for through local authorities and this Bill, but that is not the primary focus of the Bill in front of the National Assembly this afternoon.

Can I thank the Cabinet Secretary for his statement? I was very pleased to accompany you yesterday, Cabinet Secretary, to a very chilly site in Merthyr Tydfil, the Trecatti site. The microclimate there, actually, that you experienced is called ‘an overcoat colder’. I was particularly pleased to be there with you on that day when you brought the Bill into the National Assembly, as we take this step forward towards the devolution of tax in Wales as a key component of the Welsh Government’s very welcome strategy towards aiming to achieve a zero-waste Wales. But, as we’ve already heard, the aim of this tax is actually to reduce itself as we go forward, and my question is really about the community grants scheme funding, because, as that revenue decreases, so the funds available to the grants scheme will decrease, and I did talk to you yesterday about the excellent projects that have benefited from the Biffa funds in my constituency. So, can I ask you, Cabinet Secretary, to confirm that, when you do review the community grants scheme, you’ll give consideration to alternative sources of funding for such schemes as that landfill disposals tax diminishes?

Can I thank Dawn Bowden both for her question and for her company yesterday on the snow-capped hills of Merthyr? As we stood there, our only consolation was that members of the media had been sent out 25 minutes before us and had been enjoying the view for a lot longer than we needed to.

The points she makes about the community fund are well made, and it was very good to hear directly both from her and from people running that site the way in which they had been able to make a contribution to some very important local environmental activities. My aim, as I’ve said, is to design a scheme that is administered in the most effective and slimmed-down way in order to go on putting investment into the community aspect of the fund for as long as we can, while revenues allow.

Can I welcome the Cabinet Secretary’s statement today? Landfill tax might not be the talk of pubs and clubs across Wales, but it is an important tax and can be an important tool for Welsh Government to effect environmental policy in Wales.

I’m going to be part of the Finance Committee scrutiny into the landfill tax, so I will keep my comments and questions brief today, Cabinet Secretary, the Deputy Presiding Officer will be pleased to know. I have three questions. Firstly, you and your predecessor, who’s in the Chamber today, have repeatedly stated and restated your belief that Welsh taxes should be consistent with their existing English counterparts to aid a smooth transition. There shouldn’t be a deviation, unless it is absolutely necessary, to avoid unnecessary confusion. But you did suggest in your statement today that you will be deviating from the current taxation arrangements with landfill tax where anomalies—I think that’s what you called them—exist. I wonder if you could elaborate on these anomalies and what is going to be necessary to deal with them.

Secondly, you mentioned the important issue of tax evasion. This will be a new tax, to all intents and purposes, when the existing tax is switched off, as we say. How confident are you that measures against tax evasion in the future, after the new tax comes into play, will be as efficient and rigorous as they have been up until now? I think from your comments earlier you were pointing out that, actually, the current system hasn’t been as good as with some other taxes, so I understand that you see this as an opportunity to make the system better.

And thirdly and finally, and more broadly, we are as an Assembly, as a Welsh Government, planning this, the second Welsh tax, whilst the Welsh Revenue Authority is still being devised. It’s still in embryonic form; we know that the selection of the chair will be coming up in the near future. So, the success of this tax and, indeed, the replacement of stamp duty, is linked to the success of the new authority. How are you building these new taxes, as they’re developed, into the DNA of the WRA to make sure that the new taxes and, indeed, the new Welsh Revenue Authority, do hit the ground running when the old taxes are switched off, because that will be a very sudden process? We want it to be as smooth as possible, but, one way or another, in 2018—I presume at midnight; I’m not sure the exact time that it’ll happen—those old taxes will be switched off, and we need the new taxes to be as reliable and efficient as possible. Thank you.

I thank Nick Ramsay for those three questions. He’s absolutely right to point to the importance of the Welsh Revenue Authority, and our need to build up its capacity rapidly now over the coming months. I know that he’s taken a close interest in our plans to advertise for the chair and the board of the revenue authority, and to make sure that it has the necessary skills available to it. I feel we have made a strong start in getting the authority the powers that it needs to make some early appointments on the executive side to get it the experience that it needs, and I look forward to working with the committee, the Finance Committee, which will have a particular role in relation to the Welsh Revenue Authority—the first non-ministerial department that we will have created as a Welsh Government—and the future of the authority and it’s fitness for the task it has in hand will be part of that.

Can I turn to the question that the Member raised about ways in which we have taken the opportunity of this Bill, while remaining as close as we can to existing arrangements for reasons of continuity, still to try to bring about some improvements? So, here is just one example for this afternoon. The tax as it stands has been vulnerable to litigation over what is called the ‘intention to discard’ test. So, the Bill pivots around whether or not waste being taken to a landfill site is being taken there with the intention of discarding it. If that is the intention, you are taxed, but many people taking waste to landfill have argued that because that waste has a secondary use—for example, it might produce methane, as in the example that Dawn Bowden and I saw yesterday, and that methane is used to generate electricity—therefore, the material is not being discarded because it has a secondary use. There’s been very substantial litigation before the courts around that aspect. We have taken the opportunity in this Bill to tighten and clarify the scope of the tax and to make it clear that it is the primary purpose not any secondary aspects that are to be determinative as far as that intention to discard is concerned. This is a technical tax and it will be of great interest to a relatively small number of people, but we’ve had the benefit of a very strong stakeholder group in helping us to shape it and that’s just one example of the way we intend to amend the law as it currently stands in this Bill to give greater clarity and certainty both to operators but also to the tax itself.

I very much welcome the proposals to tackle tax evasion, because it’s obvious that that is one of the things that people will do. Residents around Wedal Road disposal site report commercial operators giving residents a tenner to dispose of commercial waste to avoid them having to do that. So, I suppose my question on that one is: will the resident who accepts the tenner—who therefore doesn’t have to pay anything—will they be subject to this unauthorised transaction tax, because they obviously know what they’re doing when they’re accepting this waste?

Secondly, there’s a huge differential in the number of incidents reported by different local authorities and the amount of money they spend on trying to track down fly-tippers and I’d be interested to know a bit more about what incentive there might be for local authorities to ensure that they are tackling fly-tippers by being able to apply for additional funds to, for example, educate building contractors not just to dispose of their commercial waste appropriately, but also to actually reduce the amount of waste they generate in the construction industry. There are all sorts of ways in which this can be done, through using all the materials that are generated in the building on site, and some are much better at that than others. Also, whether money would be available to talk to retailers about how to reduce excessive packaging, which I know is something that residents regularly are concerned about—. But overall, obviously, I think—

Thank you. I think you’ve had three questions. Thank you.

I thank Jenny Rathbone for the welcome she’s given to the Bill. The tax evasion point she makes at the beginning is one we’ve touched on a number of times this afternoon. In some ways, as she says, it’s understandable. Stamp duty land tax is quite hard to evade because the house is there for everybody to see. Waste is much, much more open to evasion behaviour. I could use the time of the Assembly this afternoon—but I won’t, because I’m sure it’ll come up in front of the Finance Committee—in talking about the way in which the quantity of water that is added to waste is used as a way to evade tax that otherwise should’ve been paid and how we’re going to use this Bill to try to bear down on that.

The points that were made about packaging and local authorities are, to be frank, not really part of this Bill. On the point I made earlier in responding to the very first set of questions about a revenue-sharing possibility where Natural Resources Wales takes action that leads to activity that is currently not being properly policed being policed, and where that leads to tax being paid, that they should have a share of that, well, I think local authorities would be in the same relationship.

Could the Minister explain how recycling is divided up from landfill and how the percentage of recycling is worked out? It’s very relevant to the overall figures.

It may well be, Dirprwy Lywydd, but it’s not relevant to the Bill. The Bill has nothing to say on either of those matters directly.

Would you give way, Minister?

You’ve asked your question. It’s a question on a statement, so I think you need to write to the Minister. [Interruption.] Perhaps you need to write for further clarification. Andrew R.T. Davies.

Thank you, Deputy Presiding Officer. Two points if I may, to you, Minister. The first is that you touched, in the earlier response, on the fact that the Bill envisages capturing—that the current tax take is about £40 million, and obviously, reports say that this is a declining tax, and ultimately, it could be as low as £27 million and falling. So, have you looked at the legislation as a way of increasing the scope of capture, so that that’s one way of softening the loss of income? You’re not talking small sums of money here, in relative terms to what is at your discretion. So, I’d be interested to know whether the Bill is having a wider base to it so that it captures more waste, and thus brings in more revenue, or if not, how the Government is going to make that shortfall up.

Secondly, you made the point that the onus would be on—that the presumption is that the landowner was aware of the tipping going on. Very often, in small quantities of tipping, that can be illegal tipping, both on behalf of the tax, but also on behalf of the landlord as well, where someone’s just flung a gate open and stuck three or four loads into that field—a larger version of fly-tipping, if you like. So, how is the Bill going to capture that presumption and also offer the protection to a landlord who might find themselves in the situation where some contractors have cut the locks, driven in there and dumped five, six or seven loads, but obviously, it’s the landlord who is left paying the tax and ultimately being dragged before the courts?

I thank Andrew R.T. Davies for both those questions. It’s not the purpose of the Bill to extend the scope of capture, other than in illegal dumping of waste, which will now be brought within the tax. It’s a point that hasn’t been raised so far this afternoon, but it may be important for me to say that, of course, this tax is captured by the fiscal framework, so, as the amount of tax that we raise in Wales goes down, the block grant adjustment will take account of that, because this will be a falling tax on the other side of the border as well. It is not automatically the case that, as the tax goes down, the revenue available to Wales will go down as well. The fiscal framework and the block grant adjustment will come into play in that case.

I’m very keen to respond to his second point, because while illegal dumping of waste will be captured by this rebuttable presumption that those involved in it knew what they were doing, I’m acutely aware of the fact that there are landowners who have stuff dumped on their land with no prior knowledge of their own, and it is nothing but a headache to them as well. So, we set out, in documents accompanying the Bill, the way in which that presumption can be rebutted. I think when he has a chance later on to look at the detail of that, he will find that the circumstances that he described are very carefully defended against in the Bill and people wouldn’t find themselves vulnerable to prosecution when something had happened completely beyond their knowledge or control.

Thank you very much, Cabinet Secretary.