2. Will the First Minister make a statement on further devolution of taxes as recommended by the Silk Commission? OAQ54983

I thank Mike Hedges for that. Llywydd, while land transfer tax, landfill disposals tax and Welsh rates of income tax have been successfully absorbed as responsibilities devolved to Wales, the UK Government continues to reject the Silk recommendation in relation to air passenger duty, despite all the evidence that supports its devolution.

I just wanted to talk about air passenger duty and aggregates levy. The reason why we couldn't have aggregates levy being devolved ends at one second past 11 p.m. on Friday. So, can we expect, at two seconds past 11 p.m., aggregates levy to be devolved? And have you had any further discussion regarding the devolution of air passenger duty?

I thank Mike for both of those examples, both of which were considered by the Silk Commission. As Mike Hedges knows, and has alluded to, Llywydd, aggregates levy was subject to extensive litigation at European and domestic levels. That was all resolved in February of last year, and the UK Government announced a review of aggregates levy, and that was due to be published in the autumn. It wasn't published because of the general election; we now expect that that review will be published alongside the budget on 11 March. There is a strong synergy between the environmental responsibilities that are discharged here in Wales and aggregates levy, which is, after all, an environmental tax, and putting the two sets of responsibilities together would make very good sense. There are some complexities, which we expect the review to address. It's a declining tax, and the Welsh share of UK aggregates may also be declining. There are significant data issues with it, and, of course, it will bring no more money to Wales, because any money that we got through aggregates levy would just be subject to a reduction in the block grant. Nevertheless, the case for it is a strong one, and we look forward to the publication of the review.

As far as air passenger duty is concerned, the UK Government has announced a review there as well, as part of its Flybe activities, and that too is due to be published alongside the March budget. None of that requires further justification for devolution of APD to Wales. The case was thoroughly made in Silk, and it was thoroughly made in the Welsh Affairs Select Committee report, under the chairing of David T.C. Davies, now the Deputy Minister in the Wales Office. We look forward to the UK Government giving to Wales what has already been devolved to Scotland and Northern Ireland; there simply is no excuse for that tax not coming to Wales, as the Silk commission recommended.

First Minister, your wing of the Labour Party is hardly known for cutting taxes. In fact, you're more considered to be an individual that might want to raise them. What assurances can you give to the hard-working people of Wales, and, indeed, those businesses across Wales, that, if further taxes are devolved to Wales, your Government's not going to put them up rather than cutting the burden for people to get on with their lives?

I give this guarantee, Llywydd, that any taxes that come to Wales will be carefully considered, and that any decisions are made here, on the floor of the National Assembly—that they're not made by Government, they're made by the National Assembly. And when it came to land transfer tax, of course, we cut that tax for the vast majority of house purchases here in Wales. We cut the business element of land transfer tax, so that the vast majority of small businesses pay a lower rate of tax here in Wales than they did when his Government was in charge of it. People will look at what we did, rather than what the Member alleges, and find that our actions speak a lot louder than his words.

I'm sure the First Minister will agree with me that it's slightly curious that the Conservative Party always talk about tax as if it was something dreadful. If we didn't pay taxes we wouldn't have public services. We all know that we need investment in our public services going forward.

In response to Mike Hedges, the First Minister mentioned the air passenger duty and the aggregates levy. I know that the First Minister will, like I do, regret what is going to happen on Friday night this week, but it is going to happen. Can I suggest to the First Minister that this may be an opportunity to look at some other taxes that we might want to seek devolution of, over and above Silk? I'm thinking particularly of perhaps the capacity to vary corporation tax, which wouldn't have been possible inside the European Union; seeking possibly the capacity to vary VAT, which might be able to help grow some of our own local and indigenous businesses.

I realise, of course, Llywydd, that the First Minister in this sense is at the mercy of the Conservative Government in London. But I wonder if he would agree with me that with what is bound to be a challenging time economically for Wales we ought to be being ambitious about seeking the levers that we will need to potentially protect our economy from some of the potential negative effects.

I thank Helen Mary Jones for that, and of course I agree with her first contribution. The taxes we pay are the admission charge to a civilised society. If we didn't have taxes and didn't pay them then we wouldn't have the services that we talk about all the time on the floor of this Assembly, and which Members opposite are forever urging further investments and more expenditures for, while at the same time devising plans to deprive us of what we need in order to be able to do so.

I know that Helen Mary Jones will be interested to know that earlier this month Welsh Treasury officials hosted a meeting here in Cardiff involving the Treasury, the Scottish Government and the Northern Ireland Executive, which was a workshop to look at new common ways in which new taxes could be devolved inside the United Kingdom. And that discussion was a productive one, and it will help in some other practical ways in which new opportunities that might come our way in the future can be navigated through the machinery of the United Kingdom.