6. Welsh Conservatives Debate: Land transaction tax on commercial land

Part of the debate – in the Senedd at 5:00 pm on 9 May 2018.

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Photo of Mark Reckless Mark Reckless Conservative 5:00, 9 May 2018

Diolch, Dirprwy Lywydd. I move the motion in the name of Paul Davies AM. I will address the amendments first.

We're happy to support Plaid's amendment 2, reflecting the devolution of powers agreed between the Assembly and the Conservative-led Government at Westminster. We also support Plaid's amendment 3. With our new tax powers, we need good scrutiny over how they are used and any impact on the economy. A review of property taxation is appropriate, given the number of taxes that we now have affecting property. This should now be expedited, because we want to give urgent consideration to Labour's 6 per cent supertax on significant commercial transactions. We'll be able to compare the impact of their 6 per cent supertax—a fifth higher than the 5 per cent under stamp duty land tax—and the lower 4.5 per cent rate set in Scotland. This, industry leaders say, has made Scottish commercial property more competitive, which is evident in the increasing demand the market has experienced. Devolution allows us to assess evidence from across the UK and to reconsider mistaken policy. We must take that opportunity.

Turning to the Government amendment, which we'll be opposing in light of its dismissive 'delete all', I will address its two parts. The Welsh Government is correct to say that no Assembly Member voted against the setting of these tax bands, but as the Minister is well aware and will recall from our debates on the Finance Committee and attempts from myself and Nick Ramsay to put those rates onto the face of the Bill, the reason is because, against our entreaties, those tax bands were introduced by regulation, which we have no power to amend. It was a take-it-or-leave-it decision and our concern relates to this 6 per cent supertax on significant commercial transactions, not to the land transaction tax regime as a whole.

The second half of the Government's amendment relates to the purchase of the Cardiff bus station site just a few days before the switch from SDLT to LTT. I'm glad that the Welsh Government is now clearer about its position, however it's still not clear why it made no announcement about its end-of-March purchase of the bus station site until 18 April, or why Ken Skates gave me such an opaque answer in writing on 11 April. Perhaps I shouldn't give Ken too hard a time about his written answers at the beginning of April—he was, after all, representing us at the Commonwealth Games on the Gold Coast and our athletes were very successful under his encouraging eye. The one consistency through the Government's response to our questions is that it has not gained any tax advantage. Can it then clarify what was the motivation for rushing the Cardiff bus station deal through before the end of March? Was it so that the capital spend counted against the 2017-18 budget rather than this year's?

Of course, the reality is that Welsh Government does enjoy a tax advantage when dealing in property. It benefits from Crown exemption. So, it doesn't pay SDLT or LTT, unlike the private sector. As a property investor, it is unaffected by whether the rate is 5 per cent or 6 per cent—[Interruption.] Was that an intervention over there?