We now move to item 5 on our agenda, which is the Welsh Revenue Authority (Powers to Investigate Criminal Offences) Regulations 2018. I call on the leader of the house to move that motion—Julie James.

Motion NDM6694 Julie James

To propose that the National Assembly for Wales; in accordance with Standing Order 27.5

1. Approves that the draft Welsh Revenue Authority (Powers to Investigate Criminal Offences) Regulations 2018 are made in accordance with the draft laid in the Table Office on 21 February 2018.

Motion moved.

Thank you, Deputy Presiding Officer. The Welsh Government carried out a consultation last year about whether the Welsh Revenue Authority should have access to some of the same criminal powers as HMRC. The consultation, which closed on 2 October, focused on those powers to deter and investigate devolved tax crime—powers that are consistent with those used by HMRC in England for the taxes it is responsible for. Seventeen responses were received, including contributions from the National Crime Agency and from Natural Resources Wales. Overall, there was support for the Welsh Revenue Authority to exercise powers of entry, search and seizure, subject to obtaining a warrant, to exercise certain powers under the Proceeds of Crime Act 2002 via accredited financial investigators, and to carry out and authorise the use of covert and directed surveillance in accordance with the Regulation of Investigatory Powers Act 2000.

Following the consultation, a draft of the Welsh Revenue Authority (Powers to Investigate Criminal Offences) Regulations 2018 was laid before the Assembly on 21 February. Deputy Presiding Officer, I am today seeking the Assembly's support for these regulations. On 21 February, the Proceeds of Crime Act 2002 (References to Welsh Revenue Authority Financial Investigators) Order 2018 and the Regulation of Investigatory Powers (Directed Surveillance and Covert Human Intelligence Sources) (Amendment) (Wales) Order 2018 were laid under the negative procedure. These complete the package of investigatory powers to which the WRA will have access. Deputy Presiding Officer, I would like to highlight some points raised during the consultation and explain how we have responded.

There was a mixed response to the proposal not to provide the Welsh Revenue Authority with powers of arrest and detention, and some respondents expressed concern that the absence of these powers might prevent the WRA from interviewing suspects during an investigation. Some respondents also felt it might be appropriate for the WRA to have a general power to stop and search individuals suspected of devolved tax crime. However, given the small number of devolved tax offences expected to be investigated each year, we do not believe it is currently proportionate for the WRA to have access to arrest and detention powers, nor do we believe that it is necessary for the WRA to have access to a general stop-and-search power. The absence of these powers will also not prevent the WRA from working alongside police forces, where necessary, or from requesting suspects voluntarily to attend an interview.

I would like to record my thanks to the Finance Committee and the Constitutional and Legislative Affairs Committee for their work in considering the regulations and Orders.

I call on the Chair of the Finance Committee, Simon Thomas.

Thank you, Deputy Presiding Officer. Just to echo that the Finance Committee has considered the regulations before the Assembly today, as well as the regulations made through the negative procedure, which are part of the package, as the leader of the house said. The Finance Committee is content with these powers being given to the Welsh Revenue Authority, but I do think it's right to draw the Assembly's attention to the fact that these are substantial powers. They are very strong powers, and they allow the WRA to enter properties and to examine conduct. Of course, HMRC has similar powers, and it's only fair that, in devolving taxation, we should also devolve the powers that relate to any effort to evade taxation. So, although we agree with the regulations, we would just draw the Assembly's attention in our report to these wide-ranging but necessary powers.

Can I call the Chair of the Constitutional and Legislative Affairs Committee, Mick Antoniw?

Thank you, Dirprwy Lywydd. As the Cabinet Secretary has said, these regulations provide for various provisions of the Police and Criminal Evidence Act 1984 and the Criminal Justice and Police Act 2001 to be applied to the investigation of offences conducted by the Welsh Revenue Authority, and they include obtaining entry to premises under specified circumstances and seizing relevant items.

There were only really a few points that the committee wanted to raise. The regulations give substantial powers to the WRA, and we felt that the explanation provided was reasonable, but that the instrument was worthy of reporting on grounds of being of legal or political importance or giving rise to issues of public policy that are likely to be of interest to the Assembly. 

We decided at our meeting to include another point for reporting, relating to an anomaly between the regulations and the explanatory memorandum. The explanatory memorandum states that the revenue authority must comply with statutory codes of practice made under the Police and Criminal Evidence Act 1984, but our understanding is that they need only have regard to the code and, in particular, the relevant parts of the code. There is an important difference between having to comply with something and having to have regard to it. In our report we therefore said the Welsh Government should clarify the position and, if necessary, ensure that all the relevant documents related to the regulations are corrected accordingly. 

I concur with the sentiments of the previous speakers. I think it's clearly important that the Welsh Revenue Authority does have the same tools at its disposal as HMRC currently does. We are now in that transition phase to the implementation of the new taxes, and this is an important part of ensuring that the new tax regime is properly enforced. I'm happy to support the regulations.

Thank you. Can I call on the leader of the house to reply?

Thank you, Deputy Presiding Officer. I thank Members very much for their contributions to this debate. No Government should legislate to provide a public authority with criminal powers unless it is necessary and proportionate. The consultation proposed that the WRA should have access to some of the powers currently exercised by HMRC when investigating tax crime in Wales. These established powers are accompanied by a clearly defined set of safeguards to ensure they are used proportionately and appropriately. Having considered the responses to the consultation, we have concluded that the WRA should have access to some of the powers currently available to HMRC, and I therefore formally move the regulations. Diolch.

Thank you. 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.

We'll now move to voting time unless three Members wish for the bell to be rung.