Thank you, Deputy Presiding Officer. I also welcome the report by the Finance Committee. Can I say I agree with almost everything said by Nick Ramsay and by my friend Alun Davies? The only thing I would hold with Nick Ramsay—. If we were to drop the top rate of income tax by 10 per cent, does he not think that England, across the border, would do exactly the same thing, as we engage in a race to the bottom? That's my concern—that if we enter a tax competition, we as the smaller and weaker part are going to lose.

There are three impacts of varying income tax: individual behaviour, in terms of moving to a lower tax area; impact on quality and level of public services; and the political effect caused by paying more or less than those you work alongside or those living perhaps a few hundred yards away from you. The study we undertook concentrated solely on the first of these options—what people would do. As Wales approaches the third year of partial devolution of income tax and the final year of the current Welsh Government's commitment to not raise Welsh rates of income tax, and an election year, I think it's really appropriate for this to be out there being discussed.

We've got a border, as Nick Ramsay said earlier, with 17 million people living within 50 miles of it. Many people cross the border daily for work. And we also know, and our late friend Steffan Lewis would have said, 'We're not unique in this. Other countries across Europe and across the world have exactly the same things; why do we believe in British uniqueness?' Actually, I think he said that very regularly—I certainly remember it, and I'm sure other Members do. I think that's absolutely true.

And we can look at what's happening in international studies or what happens in other places, and we probably have fewer people commuting than places like Luxembourg and the Benelux countries, and also some of the Länder in Germany. But international studies show that high-income earners are responsive to tax rates. They can decide where they live, where they have multiple homes, and they can decide which one is going to be their main home. Some professions, like barristers, are highly mobile. We also know that tax considerations are not the sole determinants of migration. The influence of non-tax factors—wages, family, house prices, and I would say especially house prices, and quality of life—cannot be underestimated, and must form part of future Welsh Government research on the impact of tax diversions across the Wales-England border. 

We were told a change in the basic rate of income tax had little effect on migration. Well, why would it? Because saving those small sums of money is not going to get you to move many miles. We know from council tax that we have huge variations in the number in each band, and we also have huge variations in the amount paid. Now, let's compare Blaenau Gwent and Monmouth. Blaenau Gwent have over half their properties in band A; Monmouth has just over 1 per cent of their properties in band A, and almost 6 per cent in the top two bands. The precept of a band D in Blaenau Gwent is 1,712. In Newport 1,198, and Monmouth 1,381. There's a substantial difference. But if you look at property prices and mortgage costs—they also vary considerably. I went on Zoopla—other places are available—to look at purchasing houses: £150,000 gets you a very nice three-bedroomed semi in Tredegar. It also gets you a one-bedroomed apartment in Monmouth.

We know from the OECD that tax competition is widespread and occurs in most countries. Taxes on capital income are most prone to tax base mobility, followed by personal income taxes. Other factors also affect tax competition and tax base mobility, such as house prices, spending on public services and easier travel to work. Also, people often live in an area where they get non-financial benefits—access to family support, family childcare, parks, beaches and leisure facilities. The political effect of increasing taxes over those of England would, I believe, be very serious. 'Why am I paying more than someone in England on the same income?' It will affect how people vote.

Whilst we know that the 'yes Wales' group are prepared to see all Welsh taxes increase by over 20 per cent, I do not believe this is a view that is universally held. Also, we know that a 1 per cent increase in the basic rate would raise £200 million. That sounds like a large sum of money, but if you put it in perspective, the Wales Audit Office has shown that over the course of the last three years, Wales's seven health boards were £352 million in the red.

Scotland had the ability to vary income tax for very many years—it did not take it. It could move up or down by plus or minus 3 per cent. What happens? Increasing income tax raises little money, makes people angry, and unless the rise is large has no appreciable effect on public expenditure. Reducing income tax costs little money but reduces spending on services. That's why Scotland kept it the same, and I'm sure we're going to.