7. UKIP Wales debate: new Welsh taxes

Part of the debate – in the Senedd at 5:03 pm on 22 November 2017.

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Photo of Nick Ramsay Nick Ramsay Conservative 5:03, 22 November 2017

Diolch. I'm pleased to move the amendment in the name of Paul Davies. This is one of those debates, I feel, where the amendments say it all. The Plaid, Welsh Conservative and Government amendments are all 'delete all', seeking to delete the motion and annihilate each other in the process. It's very generous of you, Neil Hamilton, to say that you would accept most of our amendment, given that it did delete most of your motion—but I take what you said in the spirit you meant it.

To be fair to the UKIP motion, it does make a couple of important points. Point 2 is right to say that the focus of Welsh Government should be on economic growth and the creation of well-paid jobs. That is what you would hope for from any Government. Yes, the Government should also support the most vulnerable in society, but you've got to have that initial wealth generation to share its dividends. And before Steffan Lewis jumps up and says I'm talking about trickle-down economics from the 1980s, I'm not; I'm simply talking about the importance of wealth generation to any economy. However, point 1 of the motion does get a little bogged down in rather emotive UKIP language, such as using

'Wales as an experimental tax laboratory'.

I must say, it does make the Welsh Government sound a little bit like Dr Bunsen and Beaker from The Muppet Show—Mark Isherwood liked that one. Maybe that was intentional from UKIP. Someone's clearly had a lot of fun up in your research department. Look, I do get where UKIP are coming from on part of this, but to be fair to the Welsh Government, the Wales Bill 2016 legislation does require the creation of new Welsh land transaction tax, stamp duty and land disposal tax by switching off the existing UK equivalents in Wales. Beyond that, the partial devolution of income tax in April 2019 is also a result of that UK legislation, although I appreciate it did feature as part of the Welsh Government negotiations with the Treasury in delivering the much-needed fiscal framework.

Okay, turning to the greatly debated new taxes: well, again, the Wales Bill legislation does allow for—the Welsh Government would say, 'even encourage'—the Government to look at the case for new taxes as a way of, yes, raising revenue, but also increasing accountability. Longer term Members of this place will have longer experience of this place as just a spending authority, which that new legislation has attempted to change. Where the Welsh Conservatives do diverge from the Welsh Government is the type of taxes that may or may not be considered as part of that process. Our amendment 2 cites the importance of a comprehensive tax base, which was raised earlier. By that, we mean one that is transparent, understandable and—most of all—competitive.

New Welsh taxes mustn't be something that is 'done' to people. I can see the Cabinet Secretary laughing—it might be over something else; I'm not sure. In fact, the Cabinet Secretary has said this, himself, in the past: rather, there should be a trust, a contract between the Government and the people when it comes to taxation. We shouldn't just be thinking, 'Right, how can we squeeze more money out of the tax base?' No matter how attractive that naturally is to any Government, particularly at a time when economic constraints are tight. No, we have to put the needs of the economy at the forefront—what will help the economy nurture business and create the right tax and employment environment.

On the issue of the so-called tourism tax, look, I don't intend to reopen this one today. I think comments by the Welsh Conservatives—and other parties, indeed—in previous debates make our position on that quite clear. What I would say is that the Welsh Government is completely within its rights to consider new taxes, but that process or mechanism must be one that recognises the balance between the potential harm and good to the economy, and making sure that the consideration itself of new taxation doesn't outweigh the benefits. We know how perceptions can grow, and people can be worried by even the suggestion of a change to an existing system. The Cabinet Secretary, and indeed his predecessor, said that there should be no change for change's sake. I thought that was a good maxim then, and I think it's a good maxim now. I know that it's one that the Cabinet Secretary agrees with. So, I think we should be sticking with that.

Can I say, finally, Deputy Presiding Officer, that there is no mention of borrowing in the motion? Clearly, one important aspect of tax devolution—at least it has been in debates in previous years in this Chamber—is to provide a revenue stream to support borrowing for capital projects—borrowing that has been a staple to local authorities for a long time, and to other bodies in Wales, but the Welsh Government, the Welsh Assembly has not been able to access. So, taxation devolution, if it does nothing else for good—and in the longer term we have to look at the effects that that taxation has—it does at least allow us to have a borrowing stream to invest in important capital projects. In summary, Deputy Presiding Officer, tax devolution, like it or not, is a fact of the new political landscape created by the Wales Bill. Like all tools, you can use them badly, or you can use the wrong tool for the wrong job, but that is an issue for all of us here.

On the issue, finally, of the consent of the electorate, well, of course, that doesn't just mean a referendum; that can also mean a general Assembly election, and I would hope that, moving forward, all parties here will be upfront about the tax proposals in their manifestos and in the run-up to future Assembly elections.

I do hope that the Cabinet Secretary will look again at the way that new legislation is implemented in Wales, to ensure that Wales does ultimately get a sustainable, competitive and popular—or as popular as possible—tax base in years to come.