Item 7 on our agenda this afternoon is a debate on the Finance Committee report, 'The implementation of fiscal devolution in Wales (2019)', and I call on the Chair of the committee to move the motion—Llyr Gruffydd.

Motion NDM7030 Llyr Gruffydd

Supported by Siân Gwenllian

To propose that the National Assembly for Wales:

Notes the report of the Finance Committee, 'The implementation of fiscal devolution in Wales (2019)', which was laid in the Table Office on 27 March 2019.

Motion moved.

Thank you very much, Dirprwy Lywydd. It's my pleasure to lead this debate this afternoon on the report by the Finance Committee on the implementation of fiscal devolution in Wales. The timing of this debate is very timely, of course, because in three days income tax rates decided in this Chamber will come into force. I'm sure that not many people would have thought we would have reached this point many years ago, but this, of course, will generate about £2 billion-worth of tax that'll be collected each year in Wales. The decision to introduce Welsh rates of income tax represents the largest such transfer of responsibility in Wales's history. And it's a key moment for us in terms of implementing fiscal devolution in Wales and the final part of the Wales Act 2014. Also, Monday was the one-year anniversary of the introduction of the first new Welsh taxes for 800 years, namely the land transaction tax and the landfill disposals tax. So, it's been a significant year for fiscal devolution in Wales.

I'm pleased, therefore, to open this debate today as Chair of the Finance Committee at such an important juncture, and I'd like to thank those who contributed to the inquiry. The committee is happy to report that the implementation of fiscal devolution in Wales has so far been largely successful. In particular, the establishment of the Welsh Revenue Authority, and then the subsequent implementation of the land transaction tax and landfill disposals tax, have been very positive. It's reassuring to note that the final cost of implementing the WRA was delivered within the Welsh Government's initial estimate, at around £6 million.

The committee visited the WRA offices in Treforest last year, and the positive, enthusiastic culture that the organisation has fostered and the expertise they have attracted made a very positive impression on us as committee members.

At times, when scrutinising the Welsh Government's work, criticism can be directed at civil servants, but on this occasion we feel that we should acknowledge their hard work and their enthusiasm for this process.

However, the committee notes that it is early days for the establishment of the WRA, and the committee would like to echo its concerns from last year's report regarding the number of on loan staff and seconded staff that they currently retain at the authority. And, while we recognise the benefits of this approach in the establishment of the WRA, we do believe that consideration needs to be given to workforce planning and the steps being taken to retain knowledge and experience within the authority. The WRA board told us that they were giving this issue due consideration and that a 'people committee' had been established to consider the issue of staff retention. The committee would welcome annual updates from the board specifically on this issue.

On 15 January, following a vote in this Chamber, we decided that 10p would be the Welsh rate of income tax for each band, namely the same as the consequential reduction in UK income tax rates. This means that the rates that people in Wales pay will not change this year.

From this Saturday, Welsh taxpayers will be paying these Welsh rates of income tax, and while taxpayers here in Wales will see little noticeable difference in the coming tax year, the committee feels that it is important that everyone knows about these changes and understands them, and we are concerned, perhaps, that the message is not reaching some Welsh taxpayers.

The committee heard that some had found that the leaflet that was issued by HMRC and the Welsh Government was confusing, with some interpreting it as meaning that they would have to pay 10p more than their current rates by paying income tax in Wales. In addition, the committee carried out informal polling in February, which suggested that almost a third of Welsh taxpayers remained unaware of the changes, and this is evidently concerning. The Welsh Government is about to undertake a formal evaluation of its communications activity post-implementation, and we would welcome a timely update on the outcomes of this evaluation when this is available.

HMRC confirmed that the work involved in the transfer to LTT is almost complete, and that it remains confident that the costs will come in within the revised estimate of between £1.75 million and £2 million. HMRC also confirmed that the costs for implementing Welsh rates of income tax remain also within the £7.5 million to £9.5 million range provided in October. The committee would like to receive an update on the final costs of turning off stamp duty land tax and of the implementation of Welsh rates of income tax once this information is known.

Now, as part of this inquiry, the committee invited the Secretary of State to provide evidence—as the committee did last year, of course—and we are very disappointed by the Secretary of State’s unwillingness to engage with us once again. Despite the introduction of Welsh rates, income tax remains a UK tax and HMRC is one of the UK Government departments, and that's the body that collects it. As such, evidence from the Secretary of State is essential, particularly given the failure to include 400,000 Scottish taxpayers in the new system. So, it's essential that the committee is able to establish that Wales’ interests are being adequately protected at the UK level. 

The Secretary of State’s offer to meet committee members individually and in private was very frustrating, I have to say. The committee believes that public scrutiny should be undertaken on such constitutionally significant changes and a formal, public committee session would be much more appropriate, much more transparent, and, of course, of much greater value for all of us. This is especially true when it's so important to raise public awareness of these changes. Discussions in private, as the Secretary of State was proposing, contribute nothing to the public's engagement and understanding. 

Devolution in Wales is a landscape that is constantly changing, and the committee is pleased that the latest leg of this devolution journey has been carried out in what appears to be a smooth and well-managed process. However, it's essential that we avoid complacency when it comes to informing the people of Wales of these new changes, and the committee intends to monitor this as well as the way in which the new taxes and the Welsh rates of income tax function in the coming months and years.

However, given that we have stated that it's important to recognise when things are done well, I want to commend everyone involved in the process thus far, including the various finance Ministers and officials, as well as the way in which the HMRC and Welsh Government departments have worked together.

Setting up new taxes, a new tax collection body, and making fundamental changes to the way in which taxes work in this country are significant events, and the work is progressing on time, within budget, and in a successful manner. I’d like to thank everyone, therefore, for their contributions to the committee’s inquiry, and I look forward to updating the Assembly in the coming years on this new era of Welsh fiscal devolution. Thank you. 

'On time, within budget, and in a successful manner.'

It's not always that we hear those descriptions of projects. This was very—. I don't have much to add, actually, to what the Chair of the committee has said. This was a very interesting inquiry to be involved in. Can I also thank the witnesses who came before the inquiry? We've managed to deliver, I think, a very efficient and timely report that only has three recommendations, but they're three important recommendations. As I said earlier in the finance questions to the Minister, it's very easy at the moment to proclaim every day as momentous when it comes to fiscal devolution, because there's something happening every day. And I understand that 6 April is the actual deadline date that the Welsh rate of income tax will kick in. This is clearly the most important process that the Assembly has been through, if not since the advent of devolution, certainly since the advent of further powers back in 2011. Therefore, it's clearly important that we get it right, and I know that that was the intention of everyone on the committee.

I'm pleased that the Welsh Government has accepted the three recommendations—they're pretty straightforward. If I can just turn to recommendation 3 first, given some of the concerns of the FSB that I raised earlier regarding the lack of awareness of businesses about the devolution of stamp duty and landfill disposals tax, it's clearly important that people are aware that this month, on 6 April, there's income tax devolution and what it means for them. As the Chair said, it was concerning that some people thought they were going to be charged an extra 10p on top of the UK rate of income tax. I think that would cause a mass migration across the border within a few months. So, Welsh Government, and all of us, in fact, need to do what we can to make sure that people do fully understand this. But at the same time, this is a complex process, and for those people who aren't involved in the day-to-day running of taxation, then it's something that clearly needs to be set out.

Recommendation 2 relates to knowledge transfer within the Welsh Revenue Authority, and this is important if the organisation is not only to survive now, but to be strengthened in the future, as we'd all want to see. We need to recruit, develop and retain tax-specific skills—to quote the report—in Wales. Let's face it; we've never required this depth of capability here before. This is ground-breaking stuff in every sense. But we do need it now. And that doesn't just apply to the Welsh Revenue Authority; that also applies to the Welsh Government too. We don't just need to have the taxation knowledge; we need to have the economic knowledge and the tax forecasting and economic forecasting ability as well. 

Chapter 5 of the report doesn't actually end in a recommendation, but chapter 5 covers new taxes. The previous Cabinet Secretary's intention to test the mechanism for developing a new tax—I assume that the current Minister has inherited that intention. Perhaps she can clarify that. I'm pleased that the Finance Committee looks set to be involved in the development of any new taxes, both the first one and any subsequent taxes. As with income tax, as I said before, it's clearly important that we get this process right, particularly as it's not been done before. Potentially, new taxes could have a rather fundamental effect on the economy now and in the future, going back to that forecasting mechanism I said the Welsh Government needs to develop.

Returning to the current implementation of the Welsh rate of income tax, we need to keep an eye on the anticipated transition costs. They're predicted to be £5 million to £10 million, significantly less than the £20 million to £25 million that was initially predicted for Scotland—or happened in Scotland, I should say. The reason, as stated in the report, is that the Assembly can piggyback on the system developed for Scotland. Now, let's hope that's the case. It probably will be, but at the same time, as we hear often in debates in this place, Wales and Scotland are not the same, and therefore there could be unexpected costs that we're not aware of at the moment. So, we do, as the Chair said, need to keep all of this under review, and the Welsh Government needs to make sure that the mechanism is in place so that if any of this does go awry, the Minister is aware of those problems at the earliest opportunity so that reassurances can be given to the public that taxation devolution is going ahead as it should be.

Very finally, Deputy Presiding Officer, border costs. Mike Hedges will probably mention these. If my former colleague the late Steffan Lewis were here, he would've mentioned it as well. He used to get very worked up on the committee when we endlessly talked about the border. He said that borders work elsewhere in the world and there's no reason they can't work here as well. He's probably right on that. But there will be a cost to issues such as the complex mapping of the Welsh border and that will need to be looked at. It's never been done before effectively, because it was never necessary, but now we're moving down this road, it needs to be done in the future. But I'm pleased to have been part of this debate.

It's interesting to come to a report that could be best summed up as, 'Everything's gone well.' You can tell that by the number of people who are taking part in the debate and the number of people in here. If the statement had been that everything had gone badly, it would be a very lengthy debate, we'd be struggling to make it within the hour, and people would be queueing up for it.

If I can just answer Nick Ramsay's last point, we were told that the border was being sorted out by the land registry and they were going to actually work out exactly which properties were which side of the border, and we were then told it had been done. It might have been a meeting or part of a meeting you missed, but we have actually been told that it's now been done by the land registry. So, you can put somewhere in, and they can work out not only which country it's in, or nation it's in, but they can also say how much of it is in each, which solves what I always thought was a problem, and Steffan Lewis always said would be very easy to resolve—and he proved to be right.

We've had council tax and non-domestic rates devolved for some time. The Wales Act 2014 devolved certain taxes and borrowing powers to Wales, and enabled the Welsh Government to legislate in respect of stamp duty land tax and landfill tax. That also legislates for the partial devolution of income tax, the Welsh rate of income tax. Land transaction tax and landfill tax went live, as Llyr Gruffydd said, on 1 April 2018, and are administered by the Welsh Revenue Authority. We have now reached the end of the first year of devolved land transaction and landfill disposals taxes. I look forward to seeing the end-of-year outturns for these taxes, and ask that, at the very least, a written statement is provided to this Assembly saying exactly what they are.

The evidence provided to this committee suggests that the implementation of fiscal devolution to Wales has, so far, been largely successful. The committee recognises that it's still early days in the process, but believes the positive work that has been undertaken so far should be acknowledged. Landfill disposals tax raises very little money, and the amount raised is reducing year on year. The aim of the tax when it was first brought in was to affect behaviour rather than to raise money. It was brought in to increase the cost of landfill disposals, compared to recycling, and thus make it not cost-effective to continue to use landfill, and that's actually worked, because Wales is one of the best recycling nations in the world. But the aim—while it's nice to raise money, success for the landfill tax would be to raise no money at all, because nothing was being put into landfill. I think most people in this room would see that as a huge success.

Land transaction tax has the ability to vary enormously between years. Between 2007-08 and 2010-11, it was estimated to have dropped by half. It's the second most volatile tax. Capital gains tax is the most volatile tax, but it is second in terms of volatility. So, it's nice to have it; it's going to be great, year on year, when we either do very well, and the Government gets up and says, 'Look how well we've done with land transaction tax,' or it does very badly and the opposition get up and say, 'See, your land transaction tax hasn't worked.' The reality is that it's going to vary year on year. Outside of recession, it's remarkably stable, and slow, steady growth has been predicted by the OBR, but the OBR has always predicted slow, steady growth for everything. They don't believe we're ever going to have a recession I think they could well be wrong. There will be a recession at some time, and we'll have a substantial drop in this income.

We're going to enter the first year of partially devolved income tax. The Welsh Government can vary the rate of income tax, but has made a commitment not to increase it before the 2011 election. The Scotland Act 1998 transferred the power to legislate—[Interruption.] It's 2021, sorry. I was elected in 2011. Thank you. [Interruption.] It is—2021, sorry. The Scotland Act 1998 transferred the power to legislate for local taxation and also the power to vary income tax by plus or minus 3p in the pound. This was not used by Labour or the SNP-led Governments in Scotland, and I cannot foresee the income tax basic rate being varied in Wales. Increase it, and there will be voter backlash to paying more than England; decrease it, and there'll be even greater cuts in public services. You really are stuck with what it is. You have a power that is very difficult, if not impossible, to use.

One of the things I believe all of us in the Assembly should do, and I believe have a duty to do, is to explain, as Nick Ramsay did earlier, that it's not an additional tax. It's not another 10p; it is actually just a movement of part of the tax coming to the Welsh Government directly, rather than indirectly. Whilst it'll be reallocated to Wales, the tax collection will be exactly the same as it is now.

Finally, there's an opportunity to bring in new taxes. There is a proposal for a land value tax. Some other taxes have also been considered, including one on disposal of plastics. Will the finance Minister provide an update on progress made on bringing forward a land value tax? And will the finance Minister provide an update on progress made on bringing forward other new taxes? Because there are great opportunities in the taxation system to make it fairer.

May I thank the Finance Committee’s clerking team and the Chair, Llyr Gruffydd, for their work in drawing this report together? This is an area that is new to us as a committee, of course, as well as being new to us as a Senedd and as a nation. We have been learning and developing our own expertise, as we have dealt with these taxation issues and in preparing to implement fiscal devolution in Wales. So, I have just a few comments in recommending the conclusions and recommendations made in this report, and I look forward to seeing our latest taxation powers coming into force in just a few days’ time. Of course, we are having this debate on the report earlier than normal because of that particular timetable, and I’m grateful to my fellow Members of the Assembly’s Business Committee for allowing this debate to be staged today.

I will deal with the two conclusions of the report in the wrong order, if you like. Conclusion 2—the fact the committee recognises the work undertaken in establishing the Welsh Revenue Authority anew, and they, of course, are dealing with the implementation of the land transaction tax and the landfill disposals tax, which are 12 months old now. As we heard from the Chair, the team is exceptionally professional and exceptionally exciting at the WRA and they made quite an impression on us when we visited. Of course, in looking at recommendation 1, which deals with workforce planning, I think in setting the bar so high in terms of what’s been done within the WRA in that first year, the challenge will be to maintain that standard. It became clear to us as a committee that the professionalism and experience of the workforce and the individuals driving that workforce was crucially important, and we will look forward to annual updates as to how that standard is being maintained.

In returning, then, to conclusion 1, I would like to echo what’s said there, namely that the committee is deeply disappointed in the Secretary of State’s lack of engagement on the constitutional impact of fiscal devolution in Wales. I tend to feel that the attitude of the Secretary of State towards us as an institution is disgraceful. There’s a copy here of the letter sent by the Secretary of State to the Chair of the Finance Committee, where he mentions being accountable to Parliament in Westminster and not to the National Assembly. Well, the National Assembly for Wales is a democratically elected body representing the interests of the people of Wales. If this Assembly and its committee see fit to hold anyone to account, it is our responsibility to do that, and it’s not for Alun Cairns or any other Minister of the state to set himself above accountability to the people of Wales. I can't make that point any stronger.

He is willing, apparently, to speak to individuals as Assembly Members about this issue. He is willing to provide evidence to the Welsh Affairs Select Committee in Westminster on the issue. So, he’s willing to engage with the issue and to answer questions, but the only conclusion that I can draw is that he is insulting in his attitude towards this organisation. I'm surprised to see him try to place walls between the Welsh taxation regime and the taxation regime that is still being run centrally at a UK level. There is interaction between processes in Wales and processes in Westminster, and it is entirely crucial that we can ask questions of Wales’s representative in Westminster and that he hears directly from us, as a democratically elected body here in Wales, exactly what our concerns are and the kind of assurances that we're seeking on a range of issues relating to taxation powers.

Moving on very briefly, I'm very concerned about the lack of understanding that people have of Welsh rates of income tax as they're being introduced this weekend. There are questions to be asked as to how we can raise awareness as we move forward.

I will say in conclusion, to respond to comments by Mike Hedges as to what is likely to happen to Welsh rates of income tax, and how difficult it could be politically to make a decision to increase or reduce taxes, there is value in simply having that devolution, because it puts pressure on government to work with more focus. But I do look forward in years to come to see us developing a Welsh approach to dealing with taxation. There will be further taxation powers devolved, and things will be doable in terms of income tax rates through making changes to other taxes. But those are issues for the future. We're at the beginning of the journey and I am pleased to receive applause from someone's telephone at the back here, but I'm also pleased to recommend this report to the Assembly.

Like other Members this afternoon, I very much welcome the process we've been following over the last few years. It certainly has been a journey that this place has been on, from the founding of an Assembly in 1999 to becoming a Parliament that raises taxes in 2019. I very much welcome the fact that we have seen the devolution of these powers now. I was never one of these people who believed that we required a referendum to do that, and I was certainly very pleased that we have been able to move forward with this accountability and proper form of governance in Wales.

I'd like, with your permission, Deputy Presiding Officer, to make three substantive points this afternoon. The first is, like others this afternoon, to congratulate officials and staff of the various organisations who have worked together to ensure that this has been a smooth transfer over the last few years. Sometimes the whole process of devolution can be something like pulling teeth, and can be an extraordinarily difficult task. Certainly when I've spoken to UK Ministers about the devolution of additional powers, they've made it appear to be some Herculean task that is virtually impossible to achieve within a century. So the devolution of these responsibilities on taxation has moved relatively quickly and very smoothly, and I hope that will be a lesson for the future, but we certainly need to congratulate the staff and officials who have done so.

The second point I'd wish to make is that made by the Member for Anglesey in his contribution. The report makes a point of the committee's disappointment with the decisions and actions of the Secretary of State. It is my clear view, and my experience as a Minister in this place tells me, that there is no role for the Wales Office in today's United Kingdom. As a Minister I cannot think of a single occasion when the Wales Office has been an aid to me or has enabled the proper discharge of governance. What has always worked on every occasion is the direct inter-governmental relationship between Welsh and UK Ministers. I can think of not a single occasion when the Wales Office has helped the governance of this country, and the resignation today of somebody we've never heard of, who barely visited this country and performed absolutely no duty that anybody's been able to identify, demonstrates that that office has outlived its usefulness. The inability of the Secretary of State to travel to Cardiff to give evidence and to be scrutinised, which I think is what he's really trying to avoid, is more evidence, if it's needed, that it is time to move forward to proper UK structures and proper structures of governance that are not owned by the UK Government, but are shared between the Governments of the UK. I hope that we'll be able to do that in due course.

The third point I'd like to make is that this process has moved relatively smoothly, but to what purpose? To what purpose? Is the purpose simply to hold us to account for taking the same decisions as are taken by the Treasury? Or is the purpose for us to do something different, to reflect our own values and our own beliefs? I see there are three Ministers on the front bench—health, education and finance—and I'm lucky to have worked with all three of them at different times, and all three of them—[Interruption.] Okay, let's not go there now. But all three of them will remember the conversations we've had over cash, over spending, and the very difficult decisions that we've had to take over recent years. I do not believe that austerity is a correct policy choice, and I do not believe that austerity has succeeded in its stated objectives. But then neither do the Tories anymore.

So, what do we do? Do we simply continue to tax at current levels or do we actually say, 'We believe in public services. We want to protect public services. We want to invest in public services. We want to invest in the people of this country, the communities of this country and the services of country and this country's future'? And in that case, we have to have the courage to argue for taxation as well. Fair taxation that will enable us to provide the services that we require and the services that the people of Wales want. We cannot stand here making speeches about austerity and then deliver austerity through our decisions. We cannot have our cake and eat it. We've been telling UK Ministers that through Brexit and we have to accept that ourselves. If you believe in public services, then you must also argue for the taxation to pay for them. But also, let us tax in a way that reflects our values. I spent some years persuading previous finance Ministers, when they were publishing their Treasury papers, that our values should come through, should shine through our taxation policy as well. I failed to persuade any finance Minister of the importance of sustainability as a principle of taxation—I hope I'll have more luck with the current finance Minister, but I failed to persuade her predecessors—because I think it is important.

But it is important also that we recognise a declining tax base. We discussed in questions earlier the potential impact of Brexit. We talk here about Brexit as being a national disaster for this country, but it is also a disaster for our services and our ability to deliver public services. It's easy enough to say that we will not see the dividend that we were promised on the side of a bus for the national health service, but we're going to have to pay for that. And if that is the case, what does that do to our taxation policy?

I can see that I've tried your patience long enough, Deputy Presiding Officer. But I hope that we will have a debate about the nature of taxation in the future that will reflect our values, and which also will reflect our ambitions.

Thank you. Can I now call the Minister for Finance and Trefnydd, Rebecca Evans?

Thank you. I very much welcome today's debate, and I'd like to put on record my thanks to the Finance Committee for their report and for providing us with the opportunity to have this discussion today, and for the very constructive way in which the committee has engaged with this agenda throughout. I'll be responding formally to the committee's report, but I can say today that I'm pleased the committee has recognised in their report the good work undertaken in establishing the Welsh Revenue Authority. This good work has continued into operations, and the WRA's approach to tax administration has been acknowledged in the recent report by the FSB, 'Funding Prosperity: Creating a New Tax System in Wales', which, again, we discussed earlier on today.

I note the committee's recommendation that annual updates should be provided on the WRA's approach to retention of knowledge and expertise in the organisation. Work is already under way in this area, including the development of induction plans, business continuity plans, detailed guidance, and a formal knowledge-capture process for those leaving the organisation.

I'd be happy to provide an update to committee on the implementation and ongoing running costs of Welsh rates of income tax. Ensuring value for money for Welsh taxpayers remains a priority of the Welsh Government, and my officials will continue to scrutinise costs associated with implementing the new arrangements, and I'm grateful to Her Majesty's Revenue and Customs, which has shown a commitment to keeping costs to an absolute minimum.

My officials have been working closely with their counterparts in HMRC to ensure that communication and engagement activity is joined up. Evaluation has been taking place throughout the campaign to help adjust and refine our approach as necessary. And a more formal evaluation using the Government Communication Service evaluation framework will take place shortly.

I note the committee's disappointment that the Secretary of State for Wales has been unable or unwilling to engage with the committee in considering the introduction of the partial devolution of income tax in Wales. I agree with the committee's conclusion that as income tax remains a reserved tax, it would be appropriate for the Secretary of State to answer questions on the implementation process. And I would just comment that I was very pleased to provide evidence to the Welsh Affairs Select Committee on the devolution of air passenger duty very recently.

The introduction of Welsh rates of income tax this Saturday will mark the completion of the programme of work—the programme of fiscal devolution brought about by the Wales Act 2014. It will follow the successful implementation of made-in-Wales taxes a year ago—land transaction tax and landfill disposals tax, collected by the Welsh Revenue Authority—and our acquisition of new capital and revenue borrowing powers. We are also drawing on the 2014 Act to explore potential new taxes and the ways in which they could support our wider policy ambitions.

Of course, this work began well before 2014 with the reports by the Holtham commission and the Silk commission, which recommended that the Welsh Government and National Assembly should gain significantly greater abilities and responsibilities to manage the Welsh budget. Alongside our tax powers, we have gained financial responsibility for non-domestic rates, and there have been essential changes to our block grant to provide a Barnett floor and to ensure appropriate adjustments for the devolved tax revenue.

The devolution of tax powers provides the Welsh Government with a range of opportunities to develop a progressive approach to taxation, which is better tailored to Wales's needs. The tax policy framework, published in 2017 by the then Cabinet Secretary for finance, and the annual work plans published since have emphasised this Government's commitment to take a strategic approach to tax policy. This is now being delivered through our work to manage existing and newly devolved taxes, as well as our evolving approach to develop new taxes.

The tax policy work plan I published on 27 February fulfills the commitment given in the tax policy framework to ensure that tax-related proposals are considered robustly and in alignment with Cabinet's principles. It is in line with the principle to develop tax policy through collaboration and involvement, providing a vehicle for more open discussion with stakeholders about the direction of Welsh tax policy. The research areas in the work plan support the commitment in the national strategy to use tax powers to strengthen the link between economic growth and funding for public services, and to do so in a way that supports business and is fair.

Together with the block grant, Welsh taxes will fund the vital public services on which many people in society depend. When Welsh rates of income tax are introduced, the decisions about some £5 billion of tax revenue collected in Wales will be made in Wales by central or local government. With the powers devolved to Wales, we have the opportunity to look at taxes collectively. This will change the nature of our debates about revenues and budgets in the future, and I look forward to these discussions.

I'm happy to support this motion this afternoon and I'd like to thank all Members who have contributed to the debate and to join them and echo the complimentary comments that they've made about the officials who have worked on this project. Thank you.

Thank you. Can I now call on Llyr Gruffydd to reply to the debate?

Thank you, Deputy Presiding Officer. I'd like to thank as well everyone who's taken part in this debate. I think it reflects the consensus that exists around the way that the implementation has been delivered. Nick and others have mentioned the FSB report, and their conclusions chimed very much with those of the committee. But, it isn't just the FSB, the Wales Audit Office of course, when they reported on the WRA at the end of last year, said that it has

'operated effectively to date to administer devolved taxes in Wales...The Welsh Treasury has appropriate arrangements in place to obtain assurance over HMRC's implementation of Welsh Rates of Income Tax'.

I think the message is so far so good, but as I underlined in my opening remarks, we mustn't take anything for granted, and we obviously need to retain the same level of vigilance that anyone would expect of us in this process. There was reference as well from Nick, I think, to the need to grow capacity within Wales now because this is a new discussion emerging now. We're hearing bits of it today, aren't we, in terms of what future taxation policy will look like under future Welsh Governments, and clearly we're starting maybe to tease out some manifesto commitments in the run up to 2021.

It is important, as Alun Davies said, that tax policy represents our values, and as Mike Hedges said also, it's a mean of delivering policy outcomes, isn't it? It isn't just a means of generating revenue, and that is very much going to be part of that evolutionary process that we as parties engaging in the political discourse in the run-up to the next election will be engaging in as well.

There are certainly lessons to be learnt from Scotland, as we heard during this debate. For once, the second mover advantage is quite positive, because they can make the mistakes and we can learn from them. That's certainly something that we need to take advantage of.

I just want to make a comment as well about the cross-border issue—there have been a few references to that. That is actually a piece of work that the committee is looking to undertake sometime around the autumn, in that we look at the effects of different—[Interruption.] I'm being applauded now by somebody's phone—the different impacts of differences in tax rates across borders, and I think it'll be useful for us to have that so that we can bottom-out some of those concerns that are being flagged up as issues for some, not so for others, as we heard. But I think that would be a useful contribution as a committee that we can make to that whole discussion. 

The WRA, as Rhun ap Iorwerth said, has set a very high bar, but, of course, we wouldn't expect any different. And it will be a challenge to maintain that, but’s that, of course, is what I think we need to ensure will now happen. And the response from the Secretary of State, as nearly everyone has said, to the request to give evidence—the numerous requests over recent years to appear before the Finance Committee—is very disappointing. The offer to meet with us individually undermines, I think, whichever rationale the Secretary of State has for not appearing before the committee, because it is tempting for us as eight Assembly Members to meet individually eight times. We’ll go to London to do that if we have to, and, certainly, the committee will go anywhere in order to ensure that there is transparency and that there is accountability from that direction as well.

The basic message, I think, from me here is: if we can continue over the coming years to put fiscal devolution into practice in the way that it has been implemented so far, then, in my opinion, we will, as an institution, as we approach the twentieth anniversary of this Assembly, be worthy, I hope, of being called a Senedd. Thank you very much.

Thank you. The proposal is to note the committee's report. 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.