But, since April, we've been on risk for this, and the concern I had about tax devolution, these Welsh rates of income tax, is they were devolved after a promise that that would be subject to a referendum, and, looking into the history of this, I had thought that there was perhaps a degree of collusion between Labour here and the Conservatives at Westminster, but I haven't seen evidence of that, and the Labour Government here doesn't particularly seem to have pushed it, and has said it should be subject to a fiscal framework that we believe works. You've got that, and it's at the Conservative end in Westminster where a promise was made only to devolve with a referendum, and that promise was broken and it was devolved without a referendum.

Now, I think there's an idea in Conservative circles, whether politically or more in the think-tank world, that the problem with devolution is we're only really deciding about spending, and, if you devolve substantial taxes that people care about, like parts of income tax, then that will push people towards the centre right, because people will be concerned about maintaining low taxes—or at least that is the theory. I'm not sure whether that's going to work, because the Conservative Government is seen to have promised a referendum, broken its word and then decided to give this power to a Labour Government—at least for now—in Wales, perhaps with a view to persuading people to vote for them. I think it's more likely to have the opposite effect.

When we change tax rates, particularly income tax, there's a revenue effect of the increased revenue you get from the higher rate, but also an incentive or avoidance effect as people perhaps work less hard or structure their affairs in such a way as to pay less of the tax. Now, I think it's a question of evidence of what's the scale of those two things, and how they balance each other. I just worry the system we've been given in Wales is one where we get all the benefit of that revenue side, but only half the cost for the basic rate, or a quarter of the cost, when you look at the 40p rate. On the other hand, the UK Government may benefit from some of the changes people make, because people who avoid higher rates of Welsh income tax, if that's what they're to be, by moving to England—that clearly increases the UK tax base for use in England rather than here. Similarly, if people decide to incorporate, which is often a way of avoiding higher income taxes, that again would be a benefit to the UK Government, because they continue to take the dividend tax. So, I just worry if that may give a skew towards the tax debate on a higher rather than a lower direction.

What is the Welsh Government trying to achieve with tax devolution? What's the vision? You didn't particularly push for this income tax devolution. It was thrust upon you; you negotiated something you were happy with. What do you want to do about it? We know what the Labour manifesto said, but the First Minister tells us that becomes less and less important as you get further away from the election. Having seen what he's done on the M4, is there an active debate as to whether income tax rates may move next year? Could Labour go back on that manifesto pledge? Will you excuse it by reference to Brexit, or are you going to keep to your manifesto pledge? In the longer term, do you see this freedom over tax rates as allowing you to build socialism in one country—not just with that one clause, but can you have a different society fundamentally in terms of tax rates in Wales compared to England, or is the integration of the two countries so great as to preclude that, or is that not something you desire?

On the other side, is it really plausible to have a Singapore across the Severn sort of model? If taxes were cut, would the revenue loss be too great, or do we really believe that the increase in people who might come to Wales or make businesses here or increase their income would be sufficient to offset it? I think we could really do with a common way of discussing this. The Office for Budget Responsibility are coming in and it's not their job to say 'Party programme: this will be x or this will be y', but what they do do for the Treasury and what you do get at Westminster is an agreed objective view as to what the tax take is if you raise or reduce a tax by 1 per cent. Do we know what those equivalent numbers are for Wales? Is the OBR providing it? Isn't it important, when we go into the next election, that there is some sort of neutral arbiter that says, 'Well, if you change the tax rate by x, then the impact on revenues is likely to be y'?

I look forward to hearing the Minister's response, and also this conference or seminar we're having at Cathedral Road on Friday, where I look forward to hearing her there. And she has the summer to think about what we're doing in this area, because I think it does need work, and it's incredibly important that we know what's happening with these taxes and the sensitives, and that we monitor what's happening within the year. Because we're six months into the year—we should get a bit more evidence on what's happening on income tax. And I hope, once the OBR starts this autumn, we'll get into a regular pattern of reviewing those when we should. Thank you.