11. Debate on the Finance Committee Report: Impact of variations in national and sub-national income tax

Part of the debate – in the Senedd at 4:47 pm on 23 September 2020.

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Photo of Alun Davies Alun Davies Labour 4:47, 23 September 2020

Of course, the power to raise tax and to levy taxes is one of the great powers of a state, along with law-making and the role of a legislator in doing so, and it really is a coming of age, if you like, of this Parliament that we have powers now to levy taxes as well as to legislate. It's about shaping the country that we want to see, about shaping the sort of society and community we want to see in this country in the future, and it's also about the maturity of this place, not only as a place for discussion and debate but also our wider political discourse as a country.

I was very taken by the remarks that we've just heard from Nick Ramsay because, in many ways, the election that we will fight next year is the first mature election and the first mature political debate that Wales will have as a country, because we will not simply be debating expenditure as we have done for the last 20 years—we've had enormous debates over how the money will be spent, but we've never been able to debate how the money will be raised, and that's a fundamentally different debate. It's a fundamentally different politics and it's a great maturing of our politics and it's something that I very much welcome.

I hope that we will be able to have the conversations that Nick Ramsay has just started about the nature of the tax base in Wales, but I think we need to go further than that. I think we need to have a debate about the nature of taxation in Wales, and this report, I think, is a landmark report, quite honestly, and I'm very grateful to Llyr, as Chair, for leading it, and to the secretariat for the support that they were able to provide to the committee over the last period that we did this work. And I say it's a landmark report because it demonstrates very clearly that the barriers that some people may have argued exist to a Welsh taxation policy are simply not there. They aren't there. Where the barrier exists, possibly, is not that determined by the Treaty of Montgomeryshire many a century ago in the border, but in our own minds, and in our own creativity and our own imagination. And I believe that as politicians and leaders in different parts of the country, we need to have a very different debate, and this report I think sets the basis for that. I don't think it's good enough for anybody on any side of the Chamber, wherever they sit in the Chamber, to simply say, 'We're going to build back better as a consequence, post COVID', without saying where the money comes from, and this report demonstrates that we can have that debate.

It isn't good enough simply to say that we need to be able to spend more on the national health service, as every party does, without saying where the money comes from. And we've got a debate later on this afternoon on second homes—a fundamentally important debate about the nature of communities across Wales. What is the role of taxation in tackling that issue? What is the role of taxation in shaping that debate? What is the role of taxation in shaping our response to climate change? I believe that we need to go much, much further in defining taxation as a part of the policy arms of Government, as the armoury of Government is, to enable us to shape different parts of our lives, and climate change is an obvious example of that.

But I also think we need to learn more lessons—[Inaudible.]