The next item is the debate on the general principles of the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Bill, and I call on the Cabinet Secretary to move the motion—Mark Drakeford.

Motion NDM6193 Mark Drakeford

To propose that the National Assembly for Wales in accordance with Standing Order 26.11:

Agrees to the general principles of the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Bill.

Motion moved.

Llywydd, thank you for calling me to open this debate on the general principles of the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Bill. I am grateful to the Chair and members of the Finance Committee and the Constitutional and Legislative Affairs Committee for their thorough scrutiny of the Bill. I welcome the Finance Committee’s recommendation that the National Assembly agrees the general principles of the Bill. I’d like to thank those who have engaged with us and contributed to our thinking as we developed the land transaction tax legislation.

The Deputy Presiding Officer (Ann Jones) took the Chair.

Rwy'n ddiolchgar i'r ddau bwyllgor hynny am eu hadroddiadau pwysig ar ddiwedd ystyriaeth Cyfnod 1 y Bil hwn. Yn amlwg, mae pwyntiau manwl yn adroddiadau’r ddau bwyllgor y bydd angen eu hystyried yn ofalus. Mae llawer o'r hyn y byddaf yn ei ddweud y prynhawn yma, Ddirprwy Lywydd, yn canolbwyntio ar y materion hynny a amlygwyd yn ystod y broses graffu Cyfnod 1 hwnnw. Rwyf wedi ysgrifennu at Gadeiryddion y Pwyllgor Cyllid a’r Pwyllgor Materion Cyfansoddiadol a Deddfwriaethol i ddarparu gwybodaeth ac eglurder ychwanegol ynglŷn â rhai o'u hargymhellion. Rwy'n bwriadu ysgrifennu eto at y Pwyllgor Cyllid i ymateb i bob un o'r argymhellion yn ei adroddiad, ac rwy'n falch o gadarnhau heddiw fy mod yn gallu derbyn dau o'r tri argymhelliad yn ystyriaeth y Pwyllgor Materion Cyfansoddiadol a Deddfwriaethol.

Rydw i'n mynd i geisio ymdrin yn eu tro â chyfres o faterion penodol a amlygir yn yr adroddiadau hynny. Rwy’n mynd i ddechrau â'r mater o ganllawiau oherwydd, wrth reswm, drwy gydol hanes y Bil, wrth ei baratoi ac wrth graffu arno yng Nghyfnod 1, bu llawer o drafodaeth am bwysigrwydd canllawiau cadarn. Yn benodol, bu pwyslais ar y rheol gyffredinol ar atal osgoi, y rheol wedi’i thargedu ar atal osgoi ar gyfer y gostyngiadau y gellir eu hawlio, y gwahaniaethau rhwng y dreth trafodiadau tir a deddfwriaeth treth dir y dreth stamp, a thrafodiadau trawsffiniol. Mae’r thema o wneud yn siŵr bod canllawiau cyfredol, manwl gywir a hygyrch ar gael wedi ei hadlewyrchu’n briodol yn adroddiad y pwyllgor ar egwyddorion cyffredinol y Bil.

Rwy’n cydnabod awydd y Pwyllgor Cyllid i ddeall y broses ar gyfer datblygu’r canllawiau hyd nes y bydd yn mynd yn fyw ym mis Ebrill 2018, ac ar y sail hon, rwy'n hapus i dderbyn argymhellion y pwyllgor ar y materion hyn. Rwyf wedi gohebu yn flaenorol â Chadeirydd y Pwyllgor Cyllid wrth i’r broses graffu fynd rhagddi ac esboniais yn yr ohebiaeth honno y bydd y gwaith o ddatblygu’r canllawiau yn fater i Awdurdod Cyllid Cymru. Rwy’n awyddus i sicrhau bod Awdurdod Cyllid Cymru yn gweithio gyda rhanddeiliaid cyn gynted ag y bo modd i ddatblygu canllawiau o ansawdd uchel, effeithiol, sy’n hawdd eu defnyddio. Bydd gweithgor yn cael ei sefydlu yn rhan gyntaf y flwyddyn hon, a fydd yn cynnwys pobl sy'n gweithio yn y maes, arbenigwyr technegol o'r tu hwnt i'r Cynulliad, a fy swyddogion fy hun, i drafod materion technegol a gweithredol ac i helpu i ddrafftio'r canllawiau.

Bydd hon yn broses ailadroddol, ond bydd y canllawiau terfynol yn barod i'w rhannu a’u trafod â threthdalwyr a'u hasiantau mewn da bryd i helpu eu dealltwriaeth o'r gyfundrefn dreth newydd. Rwy'n awyddus i barhau i roi gwybod i'r Cynulliad Cenedlaethol am y cynnydd wrth sefydlu Awdurdod Cyllid Cymru. Ail argymhelliad y Pwyllgor Cyllid yw y dylai diweddariadau o'r fath gael eu darparu bob tymor ac rwy'n hapus i weithio yn unol â’r amserlen honno.

O ran costau, mae’r adroddiad blynyddol diweddaraf ar Ddeddf Cymru 2014 a osodwyd gerbron y Cynulliad ym mis Rhagfyr yn cadarnhau nad yw ein hamcangyfrifon presennol wedi newid ers iddynt gael eu cyhoeddi y llynedd. Byddaf mewn sefyllfa i roi'r wybodaeth ddiweddaraf am gostau yn fuan, pan fydd cyfres arall o benderfyniadau wedi cael eu gwneud am gynllun sefydliadol Awdurdod Cyllid Cymru a phan fydd y gost wedi ei chadarnhau ar gyfer gwasanaethau digidol. Byddaf yn ysgrifennu at y Pwyllgor Cyllid cyn trafodion Cyfnod 2 i roi'r wybodaeth ddiweddaraf am y gwaith i ddatblygu amcangyfrifon costau, ac i nodi pryd y bydd amcangyfrif diwygiedig, terfynol ar gael.

Ddirprwy Lywydd, rwy’n troi yn awr at gwestiwn y gordal annedd ychwanegol. Ar 14 Hydref, cyhoeddais fy mwriad i gynnig gwelliannau i'r Bil yn ystod Cyfnod 2 er mwyn cyflwyno gordal o'r fath. Gwnes i hynny oherwydd bod cyflenwi gwasanaethau cyhoeddus yng Nghymru yn hollbwysig i’r Llywodraeth hon, ac at y dibenion hyn, mae'r cyllid ychwanegol y bydd y gordal yn ei gynhyrchu yn hanfodol. Fy mwriad i yw y bydd y gordal annedd ychwanegol yn dilyn yn fras reolau cyfraddau uwch treth dir y dreth stamp. Fodd bynnag, byddaf yn cymryd y cyfle, wrth gyflwyno diwygiadau Cyfnod 2, i wneud y rheolau yn gliriach a, lle bo modd, yn decach, er mwyn gwella’r modd o’u defnyddio. Rwy’n dal i fod wedi ymrwymedig i sicrhau bod y darpariaethau gordal yn addas ar gyfer anghenion Cymru. Cyflwynwyd amrywiaeth o awgrymiadau gan randdeiliaid ynglŷn â sut i wneud hynny yn ystod yr ymgynghoriad technegol diweddar. Bydd angen asesu’r rhain yn briodol ochr yn ochr â thystiolaeth o effaith cyfraddau uwch treth dir y dreth stamp wrth iddi ddod ar gael. Ddirprwy Lywydd, dyma un o'r rhesymau dros gymryd pŵer i wneud is-deddfwriaeth, i ddiwygio'r gordal annedd ychwanegol, pe byddai tystiolaeth sy'n dod i'r amlwg yn dangos bod hyn yn angenrheidiol. Byddai'r rheoliadau hyn yn ddarostyngedig i'r weithdrefn gadarnhaol. Mae hyn yn rhan bwysig o'r ddeddfwriaeth gan y bydd yn ein galluogi ni i sicrhau bod y gordal yn addas at y dyfodol a’i reoli'n effeithiol. Rwy'n ddiolchgar i'r Pwyllgor Materion Cyfansoddiadol a Deddfwriaethol, yn gysylltiedig â hyn, am eu hymgynghoriad bod y Bil yn taro'r cydbwysedd cywir rhwng yr hyn sy’n cael ei gynnwys ar wyneb y Bil a'r hyn sydd ar ôl i’w gynnwys mewn is-ddeddfwriaeth, ac ar wahân i un enghraifft, mae’r weithdrefn a ddewiswyd o ran gwneud is-ddeddfwriaeth yn un yr oedd y pwyllgor yn ei hystyried yn rhesymol ac yn gymesur.

Rwy’n troi yn awr at gwestiynau trawsffiniol. Rwy’n cytuno â phwyslais y Pwyllgor Cyllid ar yr angen i Cyllid a Thollau EM, Awdurdod Cyllid Cymru, Y Gofrestrfa Tir ac Asiantaeth y Swyddfa Brisio weithio mewn dull cydweithredol. Rwyf wedi ysgrifennu at y pwyllgor yn amlinellu'r gwaith sydd eisoes ar y gweill. Caiff opsiynau eu harchwilio yn awr o ran y ffordd orau o gynorthwyo trethdalwyr i nodi ble y mae’r ffin yn gorwedd ar deitlau perthnasol. Byddaf hefyd yn gwneud yn siŵr bod y cyrff hynny yn gweithio gyda'i gilydd i gyflawni dull integredig o ymdrin â materion gweithredol a pholisi eraill, gan gynnwys, yn bwysig, gorfodi a chydymffurfio.

Rwy’n troi yn awr at y mater o ryddhad. Mae rhanddeiliaid wedi bod yn glir yn eu hawydd i sicrhau cysondeb gyda threth dir y dreth stamp o ran rhyddhad ac eithriadau. Rwy’n bwriadu monitro’r defnydd a gwerth rhyddhad preswyl ac amhreswyl, gan mai fy null o ddiwygio rhyddhad, neu gyflwyno rhyddhad newydd yn y dyfodol, fydd yr un a nodais yn y Pwyllgor Cyllid. Mae hyn yn ei gwneud yn ofynnol i ryddhad newydd posibl gael ei gyfochri â blaenoriaethau Gweinidogion Cymru, i fod yn gost-effeithiol, i gyrraedd y targed polisi a fwriadwyd, ac i fod wedi’u seilio ar y dystiolaeth orau.

Mewn ymateb i argymhelliad 11 yn adroddiad y Pwyllgor Cyllid, rwy’n bwriadu cynnig rheol, trwy ddiwygiad Cyfnod 2, sy'n nodi sut y bydd cynlluniau contractiol awdurdodedig cydberchnogaeth yn cael eu trin at ddibenion treth. Mae'r rheol yn sicrhau ein bod yn gallu ystyried cyflwyno rhyddhad i drosglwyddiadau cychwynnol ar gyfer CoACS a chronfeydd buddsoddi eiddo awdurdodedig yn y dyfodol pan fydd digon o dystiolaeth i wneud hynny.

O ran cyfraddau a bandiau, gallaf gadarnhau fy mwriad y prynhawn yma i gyhoeddi cyfraddau treth ar gyfer yr holl drethi datganoledig mewn da bryd cyn Ebrill 2018. Bydd amseriad penodol unrhyw gyhoeddiad yn ystyried effeithiau posibl y bydd cyhoeddiadau yn eu cael ar ymddygiad drethdalwyr, a gofynion y broses gyllidebol. Yn y cyfamser, byddaf yn parhau i ymgysylltu â rhanddeiliaid a sefydliadau am gyfraddau a bandiau, fel gydag unrhyw fater cyllidebol pwysig arall. Yn y modd hwn, rwy’n credu y byddwn yn cyflawni ysbryd degfed argymhelliad y pwyllgor i gynnal ymgynghoriad llawn a helaeth ar gyfraddau a bandiau. Mae'n bwysig imi ddweud nad oes cynsail wedi’i osod gan Lywodraeth y DU na Llywodraeth yr Alban o ran cynnal ymgynghoriad ffurfiol cyn pennu eu cyfraddau. Nid yw hyn, fodd bynnag, yn atal ymgysylltu a deialog barhaus, ac rwyf yn parhau’n ymrwymedig i hynny.

Yn olaf, Ddirprwy Lywydd, i roi hyn i gyd yng nghyd-destun polisi ehangach, rwy’n croesawu adroddiad Swyddfa Archwilio Cymru, sy’n tynnu sylw at y cynnydd a wnaed dros y flwyddyn ddiwethaf ar yr agenda ddiwygio cyllidol. Mae'r archwilydd cyffredinol yn cydnabod bod hwn yn faes cymhleth, ac mae’r Bil hwn yn un o'i gerrig milltir arwyddocaol.

Rwyf hefyd yn falch o fod wedi dod i gytundeb gyda Phrif Ysgrifennydd y Trysorlys ar yr hyn sydd yn fy marn i yn fframwaith cyllidol teg, y bydd y dreth hon a threthi datganoledig eraill yn gweithredu oddi mewn iddo. Edrychaf ymlaen at drafod manylion y fframwaith â'r Pwyllgor Cyllid yfory a gwneud datganiad llafar arno yn y Siambr hon yr wythnos nesaf.

Drwy gydol y rhaglen waith hon, rydym wedi elwa ar gyngor a chefnogaeth nifer o unigolion a sefydliadau. Rwy’n ddiolchgar am eu cymorth ac rwy’n edrych ymlaen at barhau i weithio gyda nhw yn y blynyddoedd i ddod.

Bydd taith lwyddiannus y Bil hwn, os bydd yn symud ymlaen trwy'r Cynulliad Cenedlaethol, yn anfon neges bod Cymru yn parhau i fod yn uchelgeisiol ac yn hyderus wrth gymryd y cam allweddol nesaf hwn wrth ddatganoli trethi. Gofynnaf i'r Aelodau gytuno i egwyddorion cyffredinol y Dreth Trafodiadau Tir a Bil Gwrth-osgoi Trethi Datganoledig (Cymru) y prynhawn yma.

Thank you very much. I call on the Chair of the Finance Committee, Simon Thomas.

Thank you, Deputy Presiding Officer. I very much welcome the tone of what the Minister has said in response to the Finance Committee’s recommendations on this Bill. I think it’s important to set out at the start that this is widely talked about as the first piece of tax legislation in Wales for 800 years. It’s very difficult to understand what tax legislation was in Wales 800 years ago—one thing was for certain, the Welsh princes were very fond of moving their courts around, arriving at a locality and saying, ‘Right, you’re now paying for us, mate.’ That’s why we’ve got so many Welsh plac names called ‘llys’ in Wales, it seems. And that was also a very medieval way of doing things.

We also know that Edward I, shortly after conquering Wales, tried to raise a subsidy on the Welsh people in order to pay for his war in Gascony. It was very unpopular with the people of Wales because, at that stage, we weren’t sending anyone to Parliament, of course, to decide on tax legislation. It was also unpopular with the Marcher Lords for other reasons. And we also know that after conquest, the English kings often tried to levy taxes on the Welsh people, and local ‘parliamentaria’ were assembled to decide whether the levy would be paid or not. That was a very informal way of trying to reflect the parliamentary process, perhaps, and using the word parliamentarian from time to time. What we can say with certainty is that this is the first Welsh tax to be brought forward before a Welsh Parliament, that has been, at least in part, accepted in principle by the Welsh people, by the referendum in 2011, and therefore is the first real democratic approach to taxation that we’ve had the opportunity to consider in Wales. And it’s in that context that I think I’ll move on to some of the detail of what the Finance Committee now has to say.

Felly, wrth droi at argymhellion y Pwyllgor Cyllid, yn y lle cyntaf, wrth gwrs, mae’r Pwyllgor Cyllid yn derbyn ac yn cymeradwyo bod y Cynulliad yn cymeradwyo’r Bil yma. Rŷm ni’n gwneud hynny ar ddwy sail. Yn gyntaf oll, oherwydd y penderfyniad democrataidd i ddatgymhwyso treth dir y dreth stamp yng Nghymru, fe fydd, wrth gwrs, colled ariannol i gyllid y Llywodraeth oni bai ein bod ni’n creu ein system drethiannol ein hunain, ac mae hynny’n troi o gwmpas cytundeb ar y fframwaith cyllidol, fel sydd wedi cael ei grybwyll gan yr Ysgrifennydd Cabinet, a gyhoeddwyd jest cyn y Nadolig. Byddwn ni’n trafod hynny bore yfory gyda’r Ysgrifennydd Cabinet ac, wrth gwrs, fe fydd y Cynulliad yn cael cyfle i edrych ar y fframwaith ehangach yr wythnos nesaf. Ond, ym marn y pwyllgor, mae’n gwbl briodol fod y Llywodraeth yn deddfu yn y maes yma, yn cyflwyno Bil trethiant yn y maes yma, ac yn gwbl briodol, felly, eu bod nhw’n gwneud hynny yn y ffordd y maen nhw wedi ei wneud.

Fe fydd, wrth gwrs, y dreth yn cael ei gweinyddu, serch hynny, nid gan y Llywodraeth, ond gan Awdurdod Cyllid Cymru, sef corff nad yw wedi ei sefydlu eto yn llawn. Bydd yn hanfodol, ym marn y pwyllgor, bod trefniadau ar waith i sicrhau trosglwyddiad diffwdan o’r system dreth gyfredol i’r system dreth newydd fel nad yw’r newid cyfundrefn yn peri trafferth i drethdalwyr neu gynghorwyr, neu’r ymarferwyr yn y maes. Bydd yn rhaid i Awdurdod Cyllid Cymru fod yn barod i gasglu trethi o’r cychwyn cyntaf, gan sicrhau bod ganddo’r adnoddau a’r seilwaith technoleg gwybodaeth briodol i weithredu’n effeithiol. Ac rwy’n ddiolchgar iawn i’r Ysgrifennydd Cabinet am ymateb yn bositif i un o argymhellion y pwyllgor y prynhawn yma trwy ddweud y bydd mwy o fanylion ynglŷn â chostau sefydlu swyddfa Awdurdod Cyllid Cymru yn cael eu cyhoeddi cyn ein bod ni’n ystyried Rhan 2 o’r Bil yn llawn.

Nawr, fel sefydliad newydd, ym marn y pwyllgor bydd yn bwysig i’r awdurdod cyllid gael mynediad at yr un wybodaeth a’r un arbenigedd â staff Cyllid a Thollau Ei Mawrhydi yn bresennol. Credwn mai’r ffordd fwyaf effeithiol o sicrhau hyn yw sefydlu memoranda o ddealltwriaeth rhwng Awdurdod Cyllid Cymru a Chyllid a Thollau Ei Mawrhydi a’r Gofrestrfa Tir, sy’n elfen bwysig yn y jig-so yma.

Mae canllawiau ar weithredu’r darpariaethau yn y Bil yn fater pwysig a godwyd yn gyson yn adroddiad y Pwyllgor. Rydym wedi argymell, felly, fod Awdurdod Cyllid Cymru yn ymgysylltu â gweithwyr proffesiynol perthnasol yn y maes ynghylch paratoi canllawiau fel y gellir harneisio eu gwybodaeth ar gyfer llunio trefniadau yn y dyfodol a rhoi arweiniad effeithiol. Ac, fel yr oedd yr Ysgrifennydd Cabinet yn ei ddweud, mae tipyn o ohebiaeth rhyngom ni, fel pwyllgor, ac yntau ynglŷn â’r ffordd y bydd y canllawiau a’r cyngor yn cael eu paratoi.

Nawr, testun pryder i nifer o dystion ac aelodau’r pwyllgor oedd sut y byddai’r dreth yn cael ei chyfrifo ar gyfer pryniant eiddo sy’n pontio’r ffin rhwng Cymru a Lloegr. Fe ddechreuwyd craffu ar y Bil gan feddwl bod yna tua 400, o bosib, o eiddo neu dai, neu beth bynnag, yn y cyd-destun yma, ond, tua diwedd y craffu ar y Bil, fe dyfodd y nifer yna i tua 1,000 neu dros 1,000. Ac un o’r pethau oedd braidd yn syfrdanol i mi yn bersonol, mae’n rhaid dweud, i’w ddeall yn y broses yma oedd nad oedd gan y Gofrestrfa Tir ffin digidol ar eu mapiau o’r gwahaniaeth rhwng Cymru a Lloegr. Nid oedd angen, wrth gwrs, i fod yn deg, ond yn sicr bydd angen un nawr, achos mae’n hynod bwysig ein bod ni’n gwybod lle mae’r ffin. Rydym ni’n gwybod lle mae’r ffin yn wleidyddol, rydym ni’n gwybod lle mae’r ffin yn ddemocrataidd, ond, o ran prynu tŷ ac eiddo, mae’n rhaid bod y Gofrestrfa Tir yn gallu dweud yn hollol bendant wrth ymarferwyr yn y maes, wrth gyfreithwyr, prynwyr, darpar brynwyr ac ati, lle mae’r ffin.

Mae hefyd yn fater o bryder i’r pwyllgor, er ei bod yn glir yn y cyd-destun cyfreithiol sut mae’r dreth yn cael ei chodi ar y ddwy ochr, nad yw efallai mor glir i drethdalwyr sut y bydd y dreth yna’n cael ei gweithredu mewn ffordd deg rhwng Cymru a Lloegr. Y ffaith amdani yw, os bydd eiddo yn pontio’r ffin, bydd y rhan o’r eiddo sydd ar ochr Cymru yn talu treth dir y dreth stamp—sori, ar ochr Lloegr, yn talu’r dreth dir y dreth stamp, SDLT, yn Lloegr, a bydd y rhan sydd yng Nghymru yn wynebu’r dreth trafodiad tir, LTT, fel sydd gennym ni yng Nghymru. Felly, mae dwy dreth yn cael eu talu ar un eiddo, ac mae hynny’n ffaith sy’n deillio o’r systemau cyfreithiol a chyfansoddiadol presennol, ond nid yw’n gwneud codi trethi y peth mwyaf rhwydd i’w wneud, mae’n rhaid dweud. Ac yng ngoleuni’r dryswch ynghylch trefniadau trawsffiniol, roedd y pwyllgor felly yn arbennig o bryderus o ddeall bod angen map digidol a dylid comisiynu’r Gofrestrfa Tir i ddarparu map digidol o’r fath er mwyn hwyluso’r broses.

Yn ystod gwaith y pwyllgor, wrth inni graffu ar y Bil, mynegodd yr Ysgrifennydd Cabinet, fel rydym newydd ei glywed, ei fwriad i gyflwyno cyfraddau uwch o’r dreth trafodiadau tir ar gyfer pryniant eiddo ychwanegol—er enghraifft, prynu i osod, cartrefi ychwanegol, tai haf, ac ati. Roedd y pwyllgor wedi cael ei ddarbwyllo gan resymeg yr Ysgrifennydd Cabinet o ran diwygio’r Bil—dyma’r dreth sydd yn bodoli yn Lloegr a bydd y dreth yn cael ei cholli o Gymru oni bai ein bod ni’n gweld y gwelliannau. Ond, rydym yn edrych ymlaen nawr at y gwelliannau gan y Llywodraeth i weld sut fydd y dreth yma yn cael ei gweithredu yng Nghymru.

Roeddem ni’n siomedig, fel pwyllgor—ac rydym newydd glywed hyn gan y Gweinidog eto—nad yw’r Llywodraeth am gynnal ymgynghoriad llawn ar y mater hwn. Mae’r Llywodraeth o’r farn mai un o swyddogaethau allweddol y Llywodraeth yw pennu cyfraddau a bandiau treth. Fel mae’r Gweinidog newydd ei ddweud, nid yw’n digwydd mewn rhannau eraill o Brydain. Ond, fel rydym newydd drafod o ran y gyllideb, rydym ni’n edrych ar broses mwy seneddol, sydd yn gallu symud y pwyllgor a’r Senedd i gyd gyda’i gilydd i graffu mwy ar y broses o osod cyfraddau treth. Mae hynny’n bwnc y byddwn ni’n dychwelyd ato yn fwy eang, mae’n siŵr gen i, nid jest yng nghyd-destun y dreth yma.

I gloi, felly, ar y ddwy reol ar osgoi trethi sydd yn y Bil, mae yna reol dargededig ar atal osgoi ac mae yna reol gyffredinol ar atal osgoi yn y Bil. Roedd y pwyllgor wedi’i ddarbwyllo bod angen y ddau, ond roeddem yn arbennig yn chwilio am ganllawiau i sicrhau bod y rheolau yma’n glir yn y ffordd y maen nhw’n ymwneud â threthi nas datganolwyd. Felly, rydym yn cynnig yn gryf iawn i’r Cynulliad bod y Bil yn symud yn ei flaen at y cyfnodau nesaf.

Thank you very much. I now call on the Chair of the Constitutional and Legislative Affairs Committee, Huw Irranca-Davies.

Thank you, Deputy Presiding Officer. We reported on this Bill on 16 December and, as well as making some general observations, we made three recommendations. We welcome the fact that the Cabinet Secretary’s letter earlier today has responded to those recommendations and, indeed, as he’s just reiterated, has accepted two of them. So, in the words of that great sage of legislative and constitutional affairs, Meatloaf, ‘Two out of three ain’t bad’.

This Bill covers very difficult and complex issues. So, we do welcome the approach that the Cabinet Secretary has adopted in drafting the Bill, both in the early involvement of practitioners and by seeking to provide clarity in the drafting of the Bill. In particular, we welcome the element of consolidation. This will help to improve the accessibility of this piece of law, and it’s an approach our predecessor committee championed in its inquiry called ‘making laws’. I hope that this positive approach towards consolidation is repeated and developed further with future Government Bills. We are, indeed, as the Cabinet Secretary has remarked, content with the balance that has been achieved between what is included on the face of the Bill and what is left to subordinate legislation.

We note that the Bill draws on existing primary legislation from Westminster and the Scottish Parliament. However, we did feel that the explanatory memorandum could have been used to provide some greater transparency to stakeholders on how the Bill had been developed from these pieces of legislation. The Bill introduced a new procedure for the scrutiny of subordinate legislation, designed to excite us on the committee—the provisional affirmative. We found this new procedure to be sensible in principle, particularly because the National Assembly has now taken on the responsibilities for taxation in this and some other areas. But, in addition, we also agreed with the consistent and carefully considered way in which this procedure was applied in the making of specific regulations under the Bill.

We made, as I mentioned, two recommendations, seeking clarification of the Cabinet Secretary’s approach in relation to certain aspects of regulations made under section 34 and section 76. I really welcome the positive response of the Cabinet Secretary in his letter responding to the committee’s report and in his subsequent remarks this afternoon.

Our final recommendation related to regulations to amend primary legislation using the negative procedure. In our report, we agreed, and we continue to agree with our predecessor committee, that any changes to primary legislation made by subordinate legislation should be achieved by the affirmative procedure. This, we believe, ensures that the rights of the National Assembly, in terms of its scrutiny role, are protected. And we made a recommendation to this effect in relation to regulations made in accordance with section 76(2). In doing so, we expressed disappointment that this Bill, the first Welsh Government Bill in the fifth Assembly, is seeking to apply the negative procedure to regulations that amend primary legislation. The use of these so-called Henry VIII powers, and the type of procedure attached to them, arose again in our scrutiny of the landfill disposals tax Bill yesterday, and, as I’m sure he would agree, we had a frank but friendly exchange of views with the Cabinet Secretary. So, I was not surprised—none of the committee members were surprised—to see and to hear the Cabinet Secretary’s response to this particular recommendation.

We, like many respected legal practitioners and commentators, see this issue as a matter of constitutional principle, and, for that reason, we will continue to monitor the Welsh Government’s use of secondary legislation to amend primary legislation and the procedure that applies throughout this fifth Assembly. But, in closing, let me say: whilst there might be issues of constitutional principle such as this on which there is disagreement, I do think it is appropriate to reflect the acknowledgement of the committee of the constructive way in which he and his officials have consistently sought to engage with and consider with respect and with due diligence the recommendations of the committee and our role in actually ensuring the constitutional and legislative propriety of such matters. This rigour of engagement between the executive and the legislature assists effective scrutiny, and we look forward very much to this continuing.

A light afternoon for us, Cabinet Secretary, isn’t it? I’m pleased to contribute to this debate. I think we have on numerous occasions in debates and statements over the last year or two highlighted that stamp duty land tax will be the first tax devolved to Wales in several hundred years, a point made by the Chair of the Finance Committee. Indeed, as the Chair said, it is the first time that we’ve needed to do other things such as get the Land Registry to fully and completely map the England-Wales border—issues that we’ve never had to address before. So, I think it’s been a more complicated process than any of us realised it would be at the outset. I see Mike Hedges nodding vigorously in agreement. I know the Cabinet Secretary and his predecessor would agree with that.

Welsh Conservatives will be supporting the general principles of this Bill. I would say we do, of course, have no choice. That sounds a bit harsh, but, of course, we all know that the reality is that, on that fateful day or night—I’m not sure what time it happens—in April 2018, the UK stamp duty tax is turned off in Wales, and there is of course then a need to replace it, because that is what we would all seek to do, and we do need, it’s true, to have a replacement that is ready to go and is fit for purpose.

Can I thank the Cabinet Secretary for his responses to some of the Finance Committee’s recommendations, which, again, I received this morning? The Chair’s alluded to some of them. I mention in particular your response to recommendation 8, in relation to determining consideration of cross-border transactions, which has been spoken about in depth in the Chamber this afternoon. I’m sure that Mike Hedges will be raising this—yes—in further depth, so I won’t go into much depth on this other than to say that it may well only affect a minority of transactions, and in fact we weren’t entirely sure about the number that are affected, but those will be in border constituencies like mine, and this issue does need to be addressed. I know a lot of work has been done by the Cabinet Secretary and his officials to ensure that that happens. We know that Wales has a long, porous border and is more susceptible to border issues than Scotland, for instance. I think it’s around 50 per cent of the population live within 30 miles of it—I don’t remember the exact statistics, but it’s very close to the border. So, it needs to be sorted out.

As regards recommendation 10, I am mildly disappointed that the Welsh Government has on the face of it rejected the recommendation to consult before the setting of rates and bands. I think this might be semantics, in a large degree. I fully agree, actually, Cabinet Secretary, that the setting of rates and bands is ultimately a matter for the Government, and that’s the case with the Scottish Government and the UK Government and other executives. But I do think there is no harm in seeking as wide a range of views as possible prior to the setting of those bands. We do aim to be—aim to be—as transparent as possible here, and just because England and Scotland don’t do something doesn’t mean that we shouldn’t look at doing it, and maybe look at doing it differently. That said, you have committed to engaging with stakeholders as extensively as possible, so I hope that, as I said, this is semantics and that this process will be as robust as possible and that stakeholders will be happy with the end result.

I think we do have to accept that there is concern among some stakeholders, and understandably so. This is a new tax; it’s breaking fresh ground for all of us. It’s the first time the Assembly has done this and many issues need to be ironed out before the tax goes live. I’m sure that the experience that we learn from this process will help in the development of landfill tax and future taxes. So, it’s understandably a difficult process. I think we all went into this knowing that that would be the case.

So, I welcome your approach, Cabinet Secretary, and indeed the previous Minister’s approach, that the system here should not deviate too much from that across the border unless there’s a compelling case for it to do so. I know that that has been the view of the Government for a long time. It seems an eminently sensible maxim to me; it reduces the potential for confusion during the transition period and minimises the potential for a distortion of the housing market in Wales relative to England. That has been one of the concerns: that any setting of rates that are disparate with those in England will cause confusion and disruption. We heard that in the stakeholder event that we held over in the Norwegian church in Cardiff Bay last year. It’s particularly a problem for practitioners operating from England. If all the practitioners were actually operating locally here, then there might be a greater awareness of what’s happening, but clearly awareness needs to be raised across the border as well as here, and perhaps you can say a little bit about how you intend to do that.

Just finally, Deputy Presiding Officer, the second aspect of this Bill is, of course, tax avoidance and enforcement. The committee has looked in some detail at the general avoidance rule, the targeted avoidance rule—the Chair of the Finance Committee went into this—and needless to say, it is vitally important that we get this right. This is the start of a process. What was that old expression? ‘Devolution is a process not an event.’ Well, I think this is also a process, not an event and we all want to work together to make sure that we do develop the best possible tax regime in Wales over the months and years to come, and indeed a regime that is not open to avoidance, that is not just equitable, but I would like to see a system here that is better than that across the border in England. That must be our ultimate aim and goal.

Thank you, Deputy Presiding Officer. As we’ve heard two speeches from two committee chairs and one from a party spokesperson from one of the opposition parties, I think I will keep my comments brief, because I don’t want to rehearse the same old issues. But generally speaking, we welcome and accept, as Nick Ramsay said, just how necessary the introduction of this tax is, considering, as Simon Thomas mentioned, the significant decrease in Welsh funding that would come about if we weren’t to introduce such a tax in light of the changes that are to take place in two years’ time. So, I think it’s a reasonable step to introduce a new land transaction tax in order to avoid that situation arising. Of course, in terms of this afternoon’s debate, we are at Stage 1 and we will have an opportunity to scrutinise fully the types of details that we’ve just had a taster of. Of course, there’s a great deal more detail available in these very useful reports, and we’re grateful for the work of Members on both committees.

It is one of the most technically complex Bills that the Welsh Government has ever introduced. I think we should praise them on the broad-ranging consultation that has taken place on this Bill, and their willingness to include practitioners and stakeholders in the process as a whole, and the type of approach that has been reflected in the way that the Cabinet Secretary for Finance has treated with this process. I do think that we would all accept the fundamental principle that we should ensure that the transfer from the old system to the new system is as smooth as possible. It is understandable, since SDLT is long established in Wales, that practitioners are well used to that way of working, I think, therefore, that the Cabinet Secretary’s endeavours in drawing up a Bill that introduces a new tax, but one that has enough of the features of SDLT to make it easily recognisable for practitioners, is a sensible step.

Of course, I think we are eager, as has started to happen in Scotland, that we should be taking the opportunities that will emerge from having these powers to innovate in due time. I think it’s a matter of getting the balance right that is the challenge for us. This is what we will be discussing in more detail during the next stages of the Bill’s scrutiny: for example, the ability to create regional bands in order to reflect the different characteristics and natures of the housing markets and other relevant factors in various parts of Wales, and the differences in talking about the current situation as far as second homes and buy to let are concerned. Of course, that context too is different in England, and particularly in London as compared to the situation in Wales. It may be different again on a regional and local level in Wales. Therefore, what we want to ensure is that that balance is correctly struck in terms of the Bill, in terms of creating the framework where we have sufficient consistency with the old SDLT system, and then taking the opportunity to innovate. Certainly, in thinking about the debate that we have just had, we do need an appropriate role for the Senedd here—and both Chairs touched upon this issue—and we do need to ensure that as we are legislating for the first time here, in creating this tax for the first time in 800 years, then we must ensure that we get the foundations and principles right in terms of the balance of power between the Executive and the Parliament in terms of acting on this Bill and this tax, but also in terms of the way in which we legislate and tax more generally.

Can I bring a note of caution to discussions here? Remember that this is a tax that is volatile if you’re cyclical, and is highly affected by changes in the economy. We saw what happened to it in 2008 and 2009 when the British economy collapsed and the amount of stamp duty then went down. So, I’m very pleased to see it being devolved, but it’s not all win-win, and there is a level of danger, a level of risk, that is built into it, which the Welsh Government will have to deal with. I’m sure, as the Cabinet Secretary says—. And I also welcome the unanimous decision of the Finance Committee that the general principle of the Bill should be agreed by the National Assembly. I hope that the proposals to move to Stage 2 will also be agreed by this Plenary session. I also hope that the unanimity on this recommendation, achieved by the Finance Committee, can be replicated in the Chamber today.

Whilst it is important that all legislation is devoid of loopholes, deals with conflicts and is consistent throughout, it is especially true of tax legislation. Whilst the first legislation passed in the fourth Assembly, the Local Government Byelaws (Wales) Act 2012, lacked, amongst other things, the mechanism to resolve disputes between county or county boroughs and community or town councils regarding the implementation of byelaws, this has as yet created no problems. Any loophole or anomaly in tax legislation will be ruthlessly exploited and lead to a reduction in the money available for Welsh services. Thus it is imperative that loopholes are not available in this legislation and that the drafting is correct. And remember there will be people earning very large sums of money whose main aim in life will be to find loopholes in it, to find ways of avoiding tax on it, and they will have spent hours trying to find any way to avoid it, as they do with all sorts of other taxes.

As important as drafting the legislation is, getting a no-detriment agreement with the Treasury is probably more important. Remember that London is an international city. High-cost property in London is bought by people from all over the world and as the pound reduces in value, as it has done since June, then the cost of property in dollars, euros and other currencies decreases, thus leading to an increase in property prices in London in pounds. With further reductions in the value of sterling against other currencies likely in the next two years, then the value of London properties in pounds is likely to increase. If we are set a fixed proportion of land transaction tax on day one, then as London prices increase, no matter what the Welsh Government does or this Assembly does, we are bound to lose. So, we need to have no detriment there. London is different and I think that we need to make sure we get that sorted out, or we’re going to pay a very high price.

Returning to the proposed legislation and the Finance Committee’s report, cross-border issues concern me, although not all committee members were quite as concerned.

‘Recommendation 7: The Committee recommends that, should the National Assembly agree the provisions in this Bill, the Welsh Government should commission the Land Registry to carry out the work of providing a map of the border between Wales and England in readiness for the commencement of Land Transaction Tax.’

There is a desperate need for the boundary to be known by the Land Registry prior to the commencement of the Act in order for the right tax to be paid to the right body. When the committee commenced the investigation into this, the number of properties identified as cross-border were very few. The number increased rapidly up through the hundreds, and I think the last figure we had was possibly more than 1,000. This led to recommendation 8:

‘The Committee recommends that further information is produced by the Welsh Government explaining how it intends the legislation to determine the apportioning of the consideration payable on cross-border property transactions. This information should cover issues such as “just and reasonable apportionment”, and clarity on requirement for two transfers for cross-border transactions. This information should be available before any Stage 2 considerations.’

I think you’ve got to remember that if we don’t get this right, we’ll know where the Welsh border is because it’ll have a long row of houses and buildings going along it, because it will be a means of reducing people’s tax—the amount they have to pay. So, I don’t think we want to be able to identify it by a street going from the border in Monmouth all the way up to where it touches the Wirral. I think what we want to do is have a border that is not covered in houses and other buildings, because we don’t want to give that incentive to build along the border, which you will if it’s a means of saving tax. So, it’s important that the incentive does not exist.

The legislation is necessary because, as Nick Ramsay said, they turn the tap off in 2018 and if we don’t put the tap back on again, we end up with a gap in the amount of money coming into Wales. But it really is important that no loopholes or perverse incentives exist.

Finally, I hope we can unanimously support moving to Stage 2, just as the Finance Committee did unanimously, because I think it really is important to take taxation forward in Wales.

I think it’s safe to say that my party doesn’t approach the devolution of the first tax in Wales for 800 years with the same enthusiasm or excitement as perhaps some Members, particularly on the Plaid side of the Chamber, but we do respect those who do see and emphasise that significance. On our own journey in this direction, we opposed the measure of devolution that went to a referendum in 2011, but the people of Wales voted for that and we accept that. What we sought to do in our manifesto was to support the process of devolution as it had developed and, in particular, what had been agreed at the St David’s Day agreement. We perhaps believed its billing there—perhaps a little naïvely—that this was going to be a clear devolution settlement for Wales that stands the test of time. And as we’ve seen with the progress and developments of the Wales Bill and some of the discussion about that, I think perhaps our optimism around that has become less.

Nonetheless, land transaction tax was one of the two taxes that were part of that consensus that were going to be devolved, and rather than continue the process of constitutional navel gazing or disagreement for the sake of it, we did say that we would respect the decision and support the devolution of this particular tax that had been agreed with others, along with the levy that we’re going to see on landfill disposal. That is not our position with respect to income tax without the referendum that was promised, however we wish to be constructive on this land transaction tax. And also, to the extent you’re considering what relatively small tax is sensible to devolve, there are good arguments for this one. In the longer term there may be opportunities to consider how stamp duty, or, here, land transaction tax, links with council tax and with business rates, and having all three elements of that revenue raising devolved may, at least in principle, allow good consideration of ways in which they may be better combined if there are arguments in that direction.

I’m grateful to the Cabinet Secretary for how he has engaged with the Finance Committee as the first stage of this process has taken place. At an initial stage I was concerned that there were some elements of the Bill that seemed to be slightly changing the rules around avoidance in a way to send a message as to how against tax avoidance we were, and we just had some concerns about using legislation for that—sending a message and slight changes in definition that could lead to great complexity and arguments within courts and uncertainty as to what the legislation did. I think it’s fair to say that the Cabinet Secretary largely mitigated those concerns and particularly some points I raised, as he I think gained confidence in explaining the legislation and taking us through some really quite technical detail as the process continued. I think I now understand why the targeted anti-avoidance rule has to include non-devolved taxes, whereas the general anti-avoidance rule does not, but I reserve my right to reconsider that as we go into Stage 2.

I think it’s right that we haven’t spent time looking at a disclosure of tax avoidance schemes specifically for Wales, which would be a sledgehammer to crack a nut. And even those who, in principle, prefer having Wales separate legislation arrangements haven’t pressed the point on that, and I think we’ve been able to take a pragmatic approach on many of these issues.

I am concerned about the communication of the measures in this Bill to the legal profession in England, and whether one of the consequences of this may be that, in future, people, for instance, who might be moving from England to Wales, where they’re using a solicitor who only rarely would undertake one or more transactions in Wales—would that solicitor feel that they were able to undertake that, or would they have to hand that process to a Welsh firm of solicitors, which might support the legal profession in Wales but might also inconvenience people in such circumstance?

I think the important thing is that if a solicitor who perhaps hasn’t genned up on the specific Welsh context as much as they might seeks to pay the land transaction tax in what was previously the normal way to HMRC—it’s important they get a clear communication quickly that that’s not required, and be directed to appropriate guidance as to how to make the appropriate payment to the Welsh Revenue Authority, which we are setting up.

Finally, in respect of some of the points addressed by Mike Hedges, I don’t think there’s any serious prospect of building of houses along the border because of the great tax advantage of doing so. I think any tax advantage is at the margin and certainly isn’t going to lead to such a building boom. I think we do need extra housing provision. But I think there are issues, and, overall, if someone has a property that straddles the border, it will be the case that sometimes the tax paid will be less. That is the nature of our progressive system, where, as the price of the house rises, you at the margin pay a somewhat higher rate above certain thresholds. If the overall cost is divided and you pay tax on each element, then the overall tax will either be the same, or it may be less, but it won’t be more. What I’m concerned about is that we don’t spend an awful lot of time trying to apportion and get into a lot of detail about precisely how you measure which part’s in England and which part’s in Wales when, actually, overall, the revenue consequences of that are likely to balance out. So, earlier on, we heard from the Cabinet Secretary that you apportion taxes according to how much of the property is in either place, being Wales or England, but I think, on further reflection and study, I hope you’ll accept that the requirement is a just and reasonable apportionment. I look forward to making the argument that what is just and reasonable would potentially be an equal split, simply because the costs of investigating in each case what the precise proportion of the overall land area, or the precise proportion of the built-up area, is in Wales and England is going to lead to considerable bureaucracy and cost for no overall benefit when, actually, the flows of finance are likely to even out. Thank you.

Thank you. I call on the Cabinet Secretary for Finance and Local Government to reply to the debate. Mark Drakeford.

Diolch yn fawr, Ddirprwy Lywydd. Can I thank all Members who have taken part in what has been I think a very constructive and interesting debate? My starting point is the one that Nick Ramsay set out. Whether you regard tax devolution as a matter of high excitement or deep trepidation, it’s going to happen and our job is to prepare for it and to do that in a way that is as careful and as competent as we can make it.

In framing this piece of legislation, the priorities that I have followed have been the ones that others have set out in the debate. First of all, continuity—that was the key message from stakeholders. On the day that this law comes into being, they want it to be recognisably the law with which they are familiar already, and we constructed the law in order to deliver that.

A second principle, though, is that, while providing for continuity, we also want to improve the accessibility of the law in this area. We’ve drawn together, under the one Bill, a series of disparate parts of existing law to make them more comprehensible and more accessible.

Then, thirdly, in the way that Adam Price set out, we’ve designed the Bill in a way that allows for the possibility of greater differentiation in the future. That’s why the Bill has this combination of powers on the face of the Bill and regulation-making powers. I’m grateful for what Huw Irranca-Davies said about endorsing that balance, because it would allow the National Assembly, in the future, to differentiate the way we do these things in Wales, as matters develop.

Taking on responsibilities for the first time in 800 years is undoubtedly challenging; it leads to some maters of complexity, which you’ve heard this afternoon. I see that Adam Price didn’t put to you the conundrum he put to me about the person who owns a property along the border that has a river that meanders in and out of Wales and wishes to sell the fishing rights on one part of a bank and where will they be when this legislation comes into being? Well, that’s what Stage 2 will be all about: working out some of those details, provided, of course, the Assembly is prepared to give the go-ahead this afternoon.

A number of Members have reminded us that this is a Bill about anti-avoidance measures as well as about land tax itself. I would have to say to Mark Reckless that, actually, I do want this Bill to send out a message that, when taxation is devolved to Wales, the National Assembly is not going to be a soft touch in any way as far as tax avoidance is concerned, albeit that we construct the Bill itself in a way that is careful and proportionate.

Will the Cabinet Secretary give way?

Of course, yes.

I’m grateful. I would like to clarify that we’re all against tax avoidance, but just sceptical of fiddly changes to legislation that may lead to greater bureaucratic and legal uncertainty, and we should avoid that. But I think actually that he has largely put my mind to rest in terms of what he’s doing and there’s significant consolidation and the regime is likely to be sensible.

I completely agree. We don’t want to go about the business in a way that leads to unnecessary complexity. We deal with anti-avoidance, I think, in a careful and proportionate way. Our first recourse will be to the specific targeted anti-avoidance rules that deal with abuses that we know have been there in the past. If that doesn’t capture matters, we have a general targeted anti-avoidance rule in the field of reliefs and, if that doesn’t catch matters, we have a general anti-avoidance rule on which the Welsh Revenue Authority will be able to rely in future—all of that with checks and balances built into the Bill.

None of this will happen, Dirprwy Lywydd, however, unless the National Assembly agrees with the advice from the Finance Committee and from the Constitutional and Legislative Affairs Committee that the Bill is fit to pass Stage 1 scrutiny. If that happens, I look forward to the further debate that we will undoubtedly need to have then.

Thank you very much. The proposal is to agree the motion. Does any Member object? No. Therefore, the motion is agreed in accordance with Standing Order 12.36.

Motion agreed in accordance with Standing Order 12.36.