I'm delighted to take part in this debate and to say that we broadly support the Conservative motion because we're a low-tax party as well, and whilst we accept that public services have to be paid for, what matters is the size of the cake more than the way it's split up. What we need to do is to grow the economy in Wales if we're to have better public services, and as we know, there are going to be growing demands for spending on health, as Alun Davies said earlier on. I welcome him to the freedom of the back benches. His great predecessor Aneurin Bevan, as Member of Parliament for Ebbw Vale, used to say that he liked to speak on the unpinioned wing, and I'm sure that Alun Davies is very much of that persuasion as well, and we look forward to many of his exhilarating contributions in the years to come.

Over the years, we've had a huge variety of tax rates in this country. I can remember back in the 1960s when we had rates of income tax that went up to 83p in the £1, and another 15 per cent on top of that for investment income. And in the year 1966–67, James Callaghan—I think he was the Chancellor of the Exchequer then—imposed an extra 10 per cent surcharge. So, the top rate of income tax was actually 107 per cent. It's no surprise that that did not raise more revenue. In fact, it did precisely the reverse. In fact, all the historical evidence shows that, on balance, it's impossible to squeeze out of the British people more than about 35 per cent of national income in taxes of all sorts. The figures that are published and available on the Organisation for Economic Co-operation and Development's website for the last 20 years show that. In the year 2000, we were taking 33.8 per cent of GDP in taxes, this year it's 34 per cent. It went down to 32.2 per cent in the meantime, in 2009, but broadly it's bumped along on that level, whether there's a Labour Government, Tory Government, coalition Governments, minority Governments or majority Governments. The tax take has gone down as low as 31.6 per cent, and at its highest 37 per cent, but on average you can't get beyond 35 per cent. And the reason is obvious: people do change their behaviour to reflect the tax background in which they live.

If we go back to the eighteenth century, perhaps the most famous form of tax avoidance at all was of the window tax; people just bricked their windows up in order to reduce the amount of tax that they had to pay. Today, we have more modern forms of tax avoidance than that, and every country has to be competitive in the world if it's to maximise the amount of tax that can be raised for a given rate, because taxpayers have never been more mobile than they are today; nothing could be easier than to move to another part of the world. And, of course, within the EU, tax avoidance is maximised by the EU's pan-European tax rules, which can enable companies to base themselves in Luxembourg, technically, and pay very, very low rates of tax there, rather than the rates of tax that are obtained in the countries where they do the bulk of their business. So, as a former tax lawyer myself, who was involved in devising schemes to minimise tax for our clients, then I can say a massive industry existed in the 1970s, and a good thing it was, when we reduced dramatically the rates of tax, that that industry could make less money because there was less work to do. And intellects such as mine were put to more productive uses by doing other things.

We can, of course, borrow more money to pay for public services, but that merely shuffles off the responsibility for paying for what we consume today onto our children and grandchildren tomorrow, and there's a fundamental immorality about that, not least if we debase the currency in order to reduce that risk. In fact, in Britain, we have a situation, as Suzy Davies referred to, where those who are on highest incomes pay a very, very substantial proportion of income tax receipts—the top 1 per cent pays actually 28 per cent of all receipts in income tax, and that's actually gone up in the last 19 years. In the year 2000, it was only 21 per cent. The top 10 per cent, as Suzy pointed out, pays 60 per cent of all taxes and the bottom 50 per cent of taxpayers pay only—well, less than 10 per cent of the total yield. So, in fact, the rich are bearing the burden of taxes, but it doesn't mean to say that if you push up the higher rates of income tax any more you would raise any more revenue.

Now, I take a different view on the devolution of taxes from many in my party; I broadly welcomed the ability of the Welsh Government to raise part of its revenue from taxation, because I believe that that cements the leap between spending and revenue raising, which enables us to hold the Government to account. They can't just shuffle off onto Westminster the blame for whatever their failings are. But I do think that if Wales is to prosper in the years ahead, it has to be competitive, obviously with England, but with more international regimes of tax as well. As I've said constantly in these kinds of debates, we've got to devise a tax system that can raise the wealth-creating potential of Wales, and maximise our national income in Wales. That's the way in which we'll pay for the growing demands on public services in the years ahead.