Diolch yn fawr, Llywydd. It’s always seemed to me that each Assembly term has its own character and particular contribution to make to the journey that has been devolution. Amongst the defining characteristics of the fifth Assembly, I believe, will be the assumption of our new fiscal responsibilities. A great deal of time has been taken in this first year—and, I believe, profitably taken—on the floor of the Assembly and in committee, in securing a fiscal framework for Wales, scrutinising and agreeing two new tax Bills, establishing the Welsh Revenue Authority, and putting in place the first set of arrangements for the independent oversight of these new responsibilities. This afternoon’s debate draws attention to a further strand in these new possibilities for Wales, because when we published our tax policy framework and work plan in June, the plan included a commitment to test the Wales Act 2014 power, which enables Wales to make the case and propose new devolved taxes.

Now, Llywydd, the process for introducing a new tax in Wales is quite certainly not a straightforward one. The Government of Wales Act 2006, as amended by the Wales Act 2014, has a new Part 4A introduced to it. This Part allows additional devolved taxes to be specified, but that requires an Order in Council to be made. And for an Order in Council to be made, a draft of it has to be approved by the National Assembly and by each House of Parliament. The road on which we are embarked today, then, is inevitably a long one, but once a new devolved tax is specified, the National Assembly will have competence to then legislate in that field in the usual way.

The command paper published alongside the Wales Act 2014 sets out the criteria that the UK Government would use to assess any new tax and the information that would need to be supplied in support of any proposal. As far as the tests are concerned, they include the extent to which any new tax affects UK macro-economic or fiscal policy, the extent to which it increases the risk of tax avoidance, and the extent to which it creates additional compliance burdens for businesses and individuals. As far as the information that would have to be provided is concerned, the Welsh Government would need to include full details of the taxable activity; the estimated revenue and economic impact; the estimated income on UK revenue or interaction with UK-wide taxes; expected impacts on businesses and individuals; assessment against all relevant legislation and directives; and compliance and collection plans.

Now, despite that rather daunting list, I continue to believe that it is important for us, as part of the work of this Assembly term, to test this new possibility and to see how the machinery that the Wales Act 2014 puts in place would work in practice.