3. Will the Minister provide an update on the Welsh Government's plans to create new taxes before the end of this Senedd? OQ55933

Yes. There are no plans to create new taxes before the end of this Senedd.

I thought that there might not be time, but there is one new tax, or relatively new tax, being operated in Wales for around three years ago, namely the land transaction tax. This morning, the First Minister and I heard powerful presentations by residents from the Llŷn peninsula who are being priced out of their communities because of the huge increase in the purchase of second homes. Increasing the higher rate of the land transaction tax could be used as a small way of trying to mitigate the second homes crisis. Could you explain what steps would need to be taken by the Government and yourself as Minister to increase the higher rate—a relatively simple process that could be implemented straight away?

I thank Siân Gwenllian for the question, and also for having the meeting with the First Minister earlier on today, and I look forward to catching up with him later this afternoon on that particular meeting as well. In theory, of course, we can make changes in-year to our land transaction tax. I'm very keen that—. We have the land transaction tax rates and thresholds that were announced just a couple of months ago now, and I do think that, in terms of the housing market, giving some kind of certainty, at least to 31 March, is important. So, I don't think I would be looking to make immediate changes in-year. I'm also very much aware of the behavioural impact of announcing changes that would then come in at a later date. The changes at the moment, which make it advantageous for people to buy houses at the moment, mean that, hopefully, we're bringing forward land transactions from next year into this financial year, which will give us a boost and give the housing market a boost and give all of those businesses that rely on house moving a boost as well. So, I wouldn't intend to give a long lead-in time for any changes in land transaction tax for that particular reason. 

Minister, Members, of course, have raised support for tourism more than any other sector since March, and, in fairness, Welsh Government has recognised those challenges and has tried to respond to a fair few of them. But any argument that a tourism tax would raise money to put back into the sector now clearly just falls apart. If we have businesses closing and potential visitors not coming—obviously, they'll be worried about their own finances anyway—well, there's obviously no-one going to be here to pay that tax. So, please don't give them another reason not to come. I don't think you'll get far with taxes in this term, as you've said, but will your bid to return to Government include a commitment to no tourism tax?

Well, Llywydd, I won't be making any manifesto announcements in the Chamber this afternoon, but I think that there is a great deal to consider in terms of the tourism tax. It's certainly something that is very popular with local authorities, especially in tourist areas, who want to improve their offer in terms of tourism. And although the policy hasn't yet been fully developed, it hasn't been fully consulted on, it's something that we are considering in terms of those four areas of taxation that the First Minister announced some time ago. So, there are no immediate plans. However, I think it is an area that does warrant some further consideration. I'm very aware of the situation in terms of the tourist sector at the moment and the difficulties they've had. So, clearly, it wouldn't be something to consider immediately, but I don't think that that means that we shouldn't have those conversations in terms of what might be appropriate at a future date, when the situation is recovered.

Minister, it seems to me that the economy of the UK needs to recover, and, more to the point, grow. The approach going forward must be more about encouraging spending and growth and confidence, and not discouraging all of these by imposing any higher tax burdens for Wales. Do you agree with that statement?

I would love to encourage spending and growth and confidence, but I think that the Chancellor has poured a bit of cold water on that today in terms of announcing a freeze on the pay of public sector workers—public sector workers who spend their money in the local economy and now will be even more concerned about their future finances as well. So, I think that this will put the brakes on any spending that they might have thought of bringing forward as well.

But my approach to taxation is one that is entirely transparent and inclusive. And you know that the Welsh Government has published its tax principles, and that's about creating taxes within the context of the Well-being of Future Generations (Wales) Act 2015, creating taxes that are fair, and creating taxes that are simple to administer and so on. So, our approach is very clear and I don't think that there's anything that people should be fearful of, because we're very focused on creating a progressive agenda.

I accept that it would be very difficult to bring in new taxes before the end of this Senedd term, which is only four or five months away, but the Welsh Government can make changes to existing taxes. Will you consider adding more, higher bands to council tax? It seems to me ridiculous that somebody paying £400,000 for a house, or has a house in the £400,000 bracket, is paying the same council tax as somebody with a £2.5 million or £3 million house. Also, something that is a recurring theme—stopping properties built as residential properties from being registered as small businesses and getting small business rate relief.

I thank Mike Hedges for raising that. Both of these issues are ones that he has raised with me in the past as well. I did explore the first suggestion about adding additional council tax bands, but I'm advised that that couldn't be done properly without a full revaluation exercise of all of our domestic dwellings here in Wales, and that couldn't be achieved before the next Senedd term, so it's not something we could do immediately. And obviously, those changes to council tax bands couldn't really be proposed without some full and substantive consultation with council tax payers, local authorities and others who would be affected.

Revaluation exercises are really significant undertakings and they cost tens of millions of pounds, and I understand that they take around three years to complete, using the current methodology. But, that said, we did commission the independent research from the Institute for Fiscal Studies, which was published earlier this year, and that does look at what the impact would be of a council tax revaluation, and it could definitely make a more progressive system. So, we'll be drawing together the findings of the research that we've commissioned for both council tax and, actually, non-domestic rates in the new year, and I think it would then be for the next Government to determine the way forward. But it is a very interesting proposal. And, similarly, the suggestion in terms of increasing—I think what's behind Mike's question is suggesting increasing—the number of nights that a property must be let for and advertised for if it's to be classified as a holiday let would also require legislation as well. So, we're going to find it difficult, I think, to undertake any further action that requires legislation, given the pressure on our legislative timetable across the next few months.