7. Welsh Conservatives Debate: Welsh Rate of Income Tax

Part of the debate – in the Senedd at 4:59 pm on 23 January 2019.

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Photo of Alun Davies Alun Davies Labour 4:59, 23 January 2019

You might be saying that, but I'm not sure it's an entirely convincing argument, but we'll have that debate.

So, what do we do as a response? I don't think it's good enough, quite honestly, for a Labour Government simply to make faces at the Conservatives and blame austerity for all our problems. One of the issues that we have to face and one of the tests that we have to face is to take responsibility for some of the issues that we face here today. It isn't good enough to say, 'As a Welsh Government, we want to spend more money on the health service, on local government, on education or whatever it happens to be. We've a power to raise that money, but we declined to use that power, but we still want to spend more.' That is no longer an adequate response to the challenges we face, and the challenges we face are greater than I think some people understand and realise.

When Theresa May stood in front of the Conservative conference in the autumn and said, 'Austerity is at an end', she was fundamentally wrong, and she was fundamentally misleading people, because if we take health spending at current levels and we assume that we will not be cutting the health service into the future, we will see reductions in expenditure in every other service in order to pay for that—every other service. And in Wales, we will see, as Nick Ramsay has pointed out and as Rhun ap Iorwerth has pointed out, a reduction in the tax base, which will further reduce our ability to tax in this country. So, we have to have a fundamental conversation about that and a mature conversation about that.

I wish the Welsh Government was accepting the two Plaid Cymru amendments this afternoon, because I think it does send a signal that we are willing to have that more mature debate, that we are willing to take responsibility, not simply to pass resolutions and make speeches, but to actually act as a Parliament, to say that, if we want better services, we will pay for those better services, to invest in our economy, to invest in our infrastructure, to do the things that a Parliament and a Government have to do and to do that based on our values.

And the final point I'd seek to make, with your patience, Deputy Presiding Officer, is this: I hope that fairness and sustainability will be at the heart of those values, because we have an opportunity through parts of this legislation to not simply move tax rates on income tax up or down, but to look at tax in a different way and to adopt and develop new forms of taxation and to change the model of taxation. And I think that that is a very, very exciting opportunity for us as well to not only invest in our people and our place but to do so in a way that reflects our ambitions and our values.