High-quality, safe and affordable housing is the cornerstone to better health, better educational outcomes and better well-being. We know from housing need estimates that we will need an additional 7,400 homes per year for the next five years, and we are doing everything in our power to deliver the housing Wales needs. But, with new tax powers to incentivise developers to progress stalled developments, we could do more. A vacant tax alone is not the solution to the housing crisis, of course, but it is an intervention we can make to bring forward timely development. As it stands, land owners benefit from an uplift in the value of their land when it's identified in the planning process for development. Where the land is then developed, providing much-needed homes, this system works. But, where the landowner holds on to that land and it's not developed, there is a private gain, but at a public cost. By increasing the cost of holding on to land that has been identified for development, a vacant land tax could help to encourage development and rebalance who bears the cost when development doesn't take place. A vacant land tax could also help contribute to regeneration, tackling the blight of idle sites and their impact on the well-being of those who live nearby.

To begin to properly explore the opportunities of the vacant land tax for Wales, we first need the powers. We have always been clear that in seeking new powers for the first time, we will be testing the Wales Act 2014 mechanism, and we have never underestimated the challenge of navigating this process. Two years of work went into ensuring that the UK Government had the information it needed to consider the case for devolution, before we made a formal request for the transfer of powers. I had a constructive discussion with the Financial Secretary to the Treasury at a Joint Exchequer Committee meeting. We agreed it was for the Welsh Government to make policy decisions about how any new devolved tax would operate, and for this Senedd to decide whether to pass any new tax into law. The role of the UK Government and Parliament is in deciding to devolve new tax powers. However, when I made the formal request in March 2020, their response was to ask for yet more information on the operation of the tax. We have worked with the UK Government in good faith to determine and to provide the information that they will need, but it is not appropriate for the UK Government to get involved in matters that are, rightly, for the Welsh Government and this Senedd. 

The Conservatives' amendment calls on us to acknowledge that there are a number of reasons why developments may stall. Well, this is something that we've always acknowledged. We commissioned research into the reasons and their prevalence across Wales. We have also always been very clear that we're not looking to penalise those who are actively developing within the timescales of a normal process, nor those who are prevented from development by reasons that are outside their control.

We know that to achieve our policy aims, we will need to carefully consider how such a tax would be set and structured, and we will work with stakeholders to design and approach that disincentivises the behaviours that we don't want, without creating unintended consequences. But, the powers must come before the detailed policy design can be undertaken. The continuing lack of progress in devolving new powers not only denies us a potentially significant lever in meeting housing need and supporting regeneration, it suggests that the process is unworkable. Yet, in the meantime, the UK Government is pressing ahead with its plans to introduce a UK-wide residential property development tax, which will include, within its scope, taxing the profits arising from holding on to land identified for development. 

A vacant land tax is a narrow and targeted tax. It is closely aligned to devolved responsibilities, and would have little interaction with non-devolved areas. It would apply only to land in Wales, and wouldn't reasonably be expected to have a material impact outside of Wales. If we cannot secure powers for such a tax, it is difficult to believe we could secure powers for any new tax under the current process. If the UK Government were so minded to progress our request in the spirit of what we have agreed, we could today be debating whether to accept the transfer of powers, rather than continuing to regret the lack of progress. Instead, in a process where UK Government can potentially endlessly request further information, we must question whether that process is fit for purpose. Diolch.