Questions now from the party spokespeople. The Plaid Cymru spokesperson, Rhun ap Iorwerth. 

Thank you, Llywydd. Over the past few weeks, Welsh councils have been making very difficult decisions on the level of council tax for next year, at such a difficult time for so many of the people that they serve. Can the Minister tell me whether she believes council tax is fairer now than it was when she became Minister for finance in 2018?

Council tax is fairer than it's been across the period of devolution because of the sheer work that we've put into making the agenda more fair. I'll give some examples as to how we've achieved that. For example, we've ensured that young people leaving care are now exempt from paying council tax to the age of 25. We've ensured that the sanction of imprisonment has been removed for people who have been unable to pay their council tax. Clearly, being unable to pay your council tax does not make you a criminal; it means that you're in very difficult circumstances. We've worked with local government across Wales to develop a protocol that means that they will work with people who are unable to pay their council tax rather than go to court summons as a first step. So, we've made those steps. We've also ensured that we have the council tax reduction scheme in place, which is a much better scheme than that which is across the border, and it supports more than 220,000 households across Wales with their council tax bills. 

I appreciate the Minister's efforts to put a spin on things, but what I see there is an admission that we need so many mitigation steps in place because council tax is fundamentally unfair. And the right answer—if there is such a thing—is that council tax wasn't fair when she came to post, and it's still not fair today. Because of the impossible situation that councils find themselves in and the way in which council tax fits into the general squeeze on public expenditure, council tax bills will again go up by twice the rate of inflation and more again across Wales, varying from 2.65 per cent in Rhondda Cynon Taf to almost 7 per cent in Wrexham. I and Plaid Cymru have argued that this could and should have been avoided this year. Spending around £100 million of unallocated funds to freeze council tax at this difficult time would have been a valuable step in terms of helping people with the response to COVID. And I can't claim that it's a particularly innovative thing from me; the Scottish Government are doing this. Why did the Welsh Labour Government decide not to?

Well, the question that Rhun ap Iorwerth posed in his first question was, 'Is council tax fairer than it was when I came into post?' and the answer to that is, undeniably, yes, it is. The question he didn't ask me was, 'Is council tax fair?', because I would have answered that council tax is actually a regressive tax, and that's why we've been working very hard over the past couple of years to undertake a series of research projects in terms of reforming local government finance. I published the findings of that on 24 February, and that drew together all of the work that we've been doing across the past couple of years to explore reforms to council tax and, actually, non-domestic rates and the wider local government system. It considers alternative approaches to local revenue raising, such as land value tax and local income tax, as well as options for keeping and significantly improving the existing systems. It also sets out aspirations for how future funding systems should work, and those are systems that should be fairer and more progressive, strengthening local accountability and providing a sustainable footing for local services, and, of course, to be simple and to be understood. So, clearly, this isn't the end of the road in terms of making council tax fairer. We have set out research that will inform the next Government in terms of steps it might want to take, some of which are quite radical steps but nonetheless do provide, I think, a significant opportunity to improve the system. 

Thank you. There was no mention of the freezing of council tax there. We've made our views clear on that. That's a temporary step, of course, and we need to think carefully about how to reform local taxation for the longer term. It's not a politically easy thing to do, but we are talking here about tackling major inequalities, and, even with mitigation steps in place, we know that, according to the Institute for Fiscal Studies, the poorest 10 per cent in society pay some 8 per cent of their income in council tax, the next 50 per cent of the population pay around 5 per cent of their income, and the wealthiest 40 per cent only pay around 2 per cent. Now, the Minister's said that they've been having discussions on this. Well, you've been in power since 1999. How has Labour Government after Labour Government been so willing to allow these inequalities to continue? 

Well, I set out in my first answer some of the steps that we have undertaken in order to make council tax fairer, and they are significant steps. The protocol, which we agreed with local authorities, has been very significant in ensuring that people get the support that they need should they be unable to pay their council tax or struggling with it. We worked with MoneySavingExpert.com to ensure that people who have conditions, which might include dementia, for example, are able to access support for council tax. So, we've done significant work to make council tax fairer over the course of this Senedd term.

And I know that Rhun ap Iorwerth recognises how significant and huge a task reforming local government finance is. It would take probably, potentially, a whole term in order to completely change the system were we to go down some of those more difficult avenues, which I've described and which we've explored, such as the land value tax, for example. That's a major undertaking. So, clearly, there are options for the future. I'm sure that parties will set out their views on how the future system should look. But none of these things are easy to do and all of them will require significant work over a long period of time.   

The Conservative spokesperson, Mark Isherwood. 

Diolch, Llywydd. This month's Wales fiscal analysis report on the implications for Wales and the Welsh budget of the UK budget 2021 states that the Welsh Government, 

'left £610 million of unallocated day-to-day spending in Final Budget plans. With additional consequentials from the UK Budget and changes to projected devolved revenues...this means the Welsh Government currently has approximately £1.3 billion to allocate at future supplementary budgets.'

However, your written statement on 10 March, announcing an additional £380 million of non-domestic rates relief for retail, leisure and hospitality businesses in 2021-22 directly affected by the COVID-19 pandemic states that this,

'makes full use of the consequential funding for Wales resulting from the Chancellor's Budget on 3 March.'

How do you therefore explain this apparent difference and what consideration have you given to wider provision for businesses within a road map out of lockdown from the remaining carried-forward budget available to you?

I can explain that very easily, because the funding available to us next year includes both the funding that was announced in the UK Government's budget on 3 March and also the more than £600 million that we're able to carry forward into the next financial year from this year, because of the good budget management decisions that we have taken. So, across the border, you'll have seen the absolutely scandalous approach that UK Government has taken to contact tracing. Here in Wales, it's been a localised service delivered by health boards, by local authorities, getting value for money for the Welsh taxpayer and also ensuring that those workers are employed on good terms and conditions. And that has meant that our system has been much cheaper and is much more effective, I have to say, and also that money is able to be freed up for us to spend next year, giving local authorities the certainty that they need, and health the certainty that it needs, and, importantly, allowing me to earmark £200 million in reserves for business support.

I'm very happy to debate the comparative performance during the pandemic of Governments on health issues, but my question was about support for businesses and the apparent gap between your statement, that full use of the consequential funding for Wales had been made, when the figures from Wales Fiscal Analysis suggested that the figures were far greater.

After the Welsh Government issued revised grant eligibility criteria for self-catering businesses last April, Isle of Anglesey County Council's chief executive told me that the change in the guidance was designed to ensure that councils did not pay grants to people who had simply switched their property from the council tax register to business rates in order to avoid paying the council tax premium on second homes, and that the council is using the discretion allowed by the guidance to make sure that they pay genuine self-catering businesses and are not automatically disqualifying applications simply because the businesses could not show that the property generates at least 50 per cent of the owner's annual income.

When I previously wrote to you regarding eligibility, you also confirmed in writing that local authorities are not obligated to withhold payment, if they're otherwise satisfied that the application is from a legitimate self-catering business. However, a view has recently been expressed to me that local authorities should only use discretion on whether or not to award a grant where a self-catering business applicant falls just short of one of the three criteria, and they would expect local authorities to use their discretion only in such circumstances. For clarity, will you therefore confirm that both your original response to me and that of Anglesey's chief executive still stand?

The whole point of the discretionary fund is that it puts discretion in the hands of local authorities to be able to allocate grants to those businesses that haven't been able to access funding through the NDR business grant scheme. And it does give local authorities wide discretion to make those allocations to businesses that they think are important to the local community and that they feel have a genuine case to be made for financial support. It's not for the Welsh Government to direct local authorities as to how they exercise the discretion that we've given them within the fund.

No, precisely, and the question wasn't about directing local authorities; it's simply acknowledging that they have the discretion for them to exercise. So, thank you for confirming that.

In a question to you last month, I stated that although the Welsh Government initially allocated £6.3 million for the hospice emergency fund, this was less generous than equivalent funds in all other UK nations and fell significantly short of the total allocated to the Welsh Government in consequential funding from the UK Government support for hospices in England. However, our hospices and palliative community care sector has continued to provide vital care and essential services throughout the pandemic.

Hospices in Wales were facing a combined shortfall of £4.2 million by this month, but after I led the debate on palliative and end-of-life care here last month, the Welsh Government only announced £3 million extra to support them. Further, there was no indication in your draft budget for 2021-22 of continued support for hospices to maintain their essential services, despite their estimated combined shortfall of £6.1 million during 2021-22.

In response to a Labour MP last month, the Chief Secretary to the Treasury stated that the £249 million new UK Government funding for hospices generated £47 million in consequentials for the devolved administrations, including £15 million for the Welsh Government. Why, therefore, have you not allocated and even topped up the missing £5.7 million for hospices in Wales, both to respond to their urgent funding needs and to enable them to deliver more, thereby generating greater cost reductions for NHS Wales?

Well, Welsh Government receives consequentials from the UK Government on all areas of spend that fall within the devolved context, and I'll give you, as an example, the fact that the Welsh Government has distributed more funding to business than we've received as a result of consequential funding from the UK Government.

Hospice.

I'm demonstrating to Mark Isherwood that we are not a post box for consequential funding from the UK Government. The consequential funding comes in a block of funding that we are then able to allocate as per the needs here in Wales.

Now, the funding that we allocated to hospices here in Wales was on the basis that we had discussions with the hospice sector to understand the financial need that they identified, and the pot of funding was allocated accordingly. And those are the discussions that my colleague the health Minister's department were having with the hospice sector here in Wales. And, of course, our hospice sector here in Wales is smaller than the sector across the border. So, it's not the case that every penny of consequential funding we receive goes to exactly the same spending area.

Now, if it is the case that hospices are telling you that the funding that they receive isn't meeting the needs, then obviously we would want to have those discussions with the hospice sector, and I'm sure that my colleague the health Minister will pick that up with the sector, to understand their needs for the next financial year. But, as I say, the funding package that we did put in place for the sector was done so in discussion and consultation with the sector.