I questioned the Cabinet Secretary in Finance Committee last Wednesday, and a transcript of that session has been circulated to Members, so I don’t propose to go through all the ground that I covered then on some of the more technical aspects of the fiscal framework, although I was broadly satisfied with the responses the Cabinet Secretary was able to give.

I would just like to raise two areas. Within the narrow terms that the Cabinet Secretary has set in terms of protecting Welsh Government revenue, he may think he’s done a reasonably good job within the fiscal framework. But that, of course, is a necessary but not a sufficient condition for protecting the interests of Welsh taxpayers. I’d like to ask if he shares my concern about a potential asymmetry with how devolved income tax powers will work and the potential to alter Welsh rates of income tax within a band of 10 per cent. I understand that the Welsh Government has said in the Labour manifesto that these rates wouldn’t be changed during this Assembly. But were, at a later point, his or another Government to seek to increase the Welsh rate of income tax, that would lead to two effects. One, there would be a higher rate and the higher rate would, itself, increase revenue, but it would potentially also have an effect on the income tax base, and at least some of that increase in revenue might be offset by what he described as behavioural effects. In the regime proposed, all of the benefit of that higher income would go to the Welsh Government, while most of the cost of any behavioural effect would go to the UK Government. Given that the power to change that rate is held by the Welsh Government, doesn’t that create an asymmetry where the incentive is to raise taxes because the Welsh Government gets all of the revenue benefit of that, but most of the revenue cost of the behavioural changes is felt by the UK Government that isn’t making that decision?

I’d also like to just ask about when decisions were made in this area. We discussed before, Cabinet Secretary, what seemed to be your uncanny powers of foresight. You had told us that, at least, Labour Assembly Members would be weighing this up carefully over the weekend and making a decision last night, I think—Monday night or whenever it was—in your meeting. However, paragraph 14 of the fiscal framework clearly states that the Welsh Government’s funding will ultimately come from two separate funding streams, including Welsh rates of income tax. So, in signing that, you and David Gauke presumed that that devolution of income tax rates would happen. You replied and suggested that perhaps that was a mistake or I shouldn’t put too much emphasis on that, and actually it hadn’t been decided and everyone was going to be carefully considering it before any decision was made. I then went and referred to the Labour Party’s manifesto for the Assembly elections earlier this year, and note that it states in that:

‘We will guarantee not to increase Income Tax in the next Assembly term when these powers are devolved’.

Why, if the Cabinet Secretary says that no decision has been made, that it all depends on the fiscal framework and Labour AMs weighing things up, why did the Labour manifesto categorically state when? I.e., it’s a done deal. At what point between the 2015 Conservative manifesto at a UK level, when they promised there would be a referendum before income tax powers were devolved, and the Labour manifesto of 2016, when it took that as a given, was the decision changed? What discussions did Ministers in the Welsh Government have with Ministers in the UK Government, whether formally or informally, to stitch up a deal to devolve tax-raising powers, having previously promised they would depend on a referendum? And why will the Welsh Government, and indeed the UK Government, jointly, not respect what it stated on the ballot paper of that 2011 referendum: that devolution of tax-raising powers would not follow a ‘yes’ vote? Why have they broken their word? [Interruption.]