There's a great deal to be welcomed in the Finance Committee's report. I would like to put on record that I'm not a member of the committee, and haven't been for some time, but I'd like to thank Llyr Gruffydd for his work in chairing the committee, and the team supporting him. I have missed being a member of that committee.

Given that the 2014 Act has been operational now for five years, and we are looking forward to a rebuilding period post COVID, I think this is a good time to review where we stand when it comes to fiscal powers held by Government. On paper, at least, this has been a very significant period in terms of the development of powers and the fiscal powers of the Welsh Government. It was a very significant step forward that we as a Senedd are responsible not only for spending money in Wales, but also for generating that money, and that's the situation we want to be in, of course.

I do recall that, when the Welsh rates of income tax were first discussed in the Senedd, I and others said that we looked forward to seeing how the Welsh Government would use its powers for taxation, and I think it's fair to say that developments have been limited. To be fair, recent attempts to introduce a vacant land tax have been made more difficult through the unwillingness of the UK Government to engage on the introduction of such a tax.

But if you look at something like council tax, then in reality very little has been done to tackle the unfairness that we know exists with council tax, and this report refers to that. Yes, the Government has taken certain steps to mitigate the impact of council tax on the poorest in society, but very little has been done to review and reform the tax itself. The Minister said last week that any reforms would take a full parliamentary term—and that’s quite true; it’s a huge task—but you have more chance of reaching the end of your journey if you make a start. Yes, there has been some research work, there’s been some mapping done, but the handbrake is still tightly applied. I would remind the Senedd once again of the evidence that exists from the IFS, for example, on problems with council tax—the poorest 10 per cent in society pay some 8 per cent of their income in council tax and the richest 40 per cent pay just 2 per cent. We must tackle this issue as a matter of urgency.

Moving on now, the pandemic has once again highlighted how inappropriate the current fiscal arrangements are. Plaid Cymru and I agree with the committee’s findings that we need to increase borrowing powers and that it would be positive to see greater flexibility introduced in terms of the Government’s opportunity to draw funding down from reserves, for example. I do think that this lack of flexibility, as has been noted on numerous occasions, has been a problem during this exceptional past 12 months and has prevented the Government from taking actions that I know that Welsh Government would have wanted to have done. But also, on the other hand, it’s important to note that even given the limited powers that we have, Ministers at times have failed to use those powers. What we need, I think, more than ever, is a Government that is willing to push the boundaries of the current fiscal arrangements. I see very little evidence that this Labour Government truly wants to push those boundaries.

In looking at recommendation 10 in the report, that places an emphasis on an issue that we’ve been aware of for some time, which has become more prominent recently, namely the need for more multi-year funding settlements. I’m sure we could all agree on the need for clarity on the timing of the UK Government’s main fiscal events. Yes, COVID has thrown a spanner in the works in that regard, but in moving forward this does need to be a priority in order to improve the current situation.

As the report points out, public engagement on fiscal issues is also very important and recent work done to increase awareness of the fact that the Welsh Government does now have the power to vary rates of taxation must continue into the next Senedd, as recommendations 1 and 2 note. To conclude, Deputy Llywydd, in the next Senedd, I think there’s a great deal of work that needs to be done in order to improve the fiscal capacity of the Welsh Government, and as we come out of this pandemic, the next Government will need to be willing to push the boundaries of the current fiscal arrangements and be willing to use the powers where appropriate.