7. Will the Minister provide an update on the Welsh Government’s income tax policy? OQ56813

We have committed not to take more in Welsh rates of income tax from Welsh families for at least as long as the economic impact of coronavirus lasts. All of our taxes are informed by our tax principles, which are set out in our tax policy framework and which include being clear, stable and simple and supporting delivery of Welsh Government policy objectives, and, in particular, supporting jobs and growth.

Thank you, Minister. I wish to endorse the points that have already been made by other Members today, namely that the United Kingdom Government's decision to raise national insurance is unfair as it will have an unequal impact on people on low incomes.

In terms of income tax, your Government has the ability to vary the rates within the bands but not the power to introduce new bands. But the Scottish Government has this power, and in 2018 they introduced two new bands, namely the additional intermediate rate for middle-income earners and a starter rate for those on low incomes, which is a penny less than the basic rate. I would like to hear, Minister, your view of the possibility of introducing a starter rate here in Wales, as this could be one practical way of mitigating the impact of the increase in national insurance on those people who receive an income significantly below the average. Would the Minister be in favour of devolving this power and, if so, would she also be in favour of introducing a starter rate of income tax for those earning less than £15,000 per annum, as in Scotland? And if not, could you explain the reason for that, please?

Well, you're absolutely right to say that the raising of national insurance contributions does have a differential impact as compared to that which would have been achieved by raising rates of income tax, partly because of the way in which the thresholds sit. So, you start paying your national insurance contributions when you're earning at a lower threshold. And of course income tax does include things like pensions and rental income and other things, which often people who are on the lower end of the economic spectrum aren't able to raise anyway. So, it is not a fair way to raise money for this particular agenda, I believe.

As you say, we don't have those powers here in Wales. We have the three bands, which we are currently maintaining at the same level because, as I say, we don't want to put additional burdens on individuals and families at this point. And we'll certainly keep this approach as long as the economic impact of the coronavirus is felt.