Diolch. Yesterday, I laid the Welsh Tax Acts etc. (Power to Modify) Bill, together with the explanatory memorandum, before the Senedd. Tax devolution is important; it provides a significant lever through which we are better able to deliver strategic priorities for Welsh citizens and businesses. The last four years of experience of tax devolution has enabled the Welsh Government to develop a considerable tax capability. We have established a distinct Welsh approach to shaping tax policy and to the delivery of that policy by the Welsh Revenue Authority. Our approach keeps the needs of Welsh citizens, communities and businesses at the forefront.

This Bill provides an additional fiscal lever by permitting Welsh Ministers to make amendments in response to changes made by the UK Government to predecessor UK taxes—that is, to stamp duty land tax and landfill tax—that will affect the Welsh block grant adjustment, and therefore the revenues available for essential public services. At the moment, every time there is a UK fiscal event, we take the risk that there may be a change that impacts on a devolved tax, and we may not have the appropriate mechanism by which to respond at pace. Such changes could have implications for businesses, the property market, and a direct budgetary impact on the Welsh Government’s resources.

This was demonstrated in July 2020 when the UK Government did not tell us in advance that they were cutting stamp duty land tax, despite the clear implications for the housing market in Wales and the UK's economic recovery from the pandemic. Although we can vary rates and thresholds for land transaction tax through regulations, we can't do this for every change.

Amendments to the Welsh tax Acts will also be permitted in order to respond to a number of other external circumstances, such as to ensure that devolved Welsh taxes are not imposed where to do so would be incompatible with any international obligations, for example, where a new trade deal is concluded with another country that has implications for our taxes.

It will also enable Welsh Ministers to make legislative changes to protect against avoidance activity, which can then be stopped with immediate effect. This includes cases where increased clarity in the legislation will put beyond doubt the intended application of the legislative provisions, and potentially benefit taxpayers by stopping the promotion of avoidance opportunities that don't actually exist. Such action has been taken by the UK Government to protect tax regimes and taxpayers in the past, and I want Welsh Ministers to be able to take similar action.

Lastly, this Bill will also allow Welsh Ministers to make changes where a court or tribunal decision identifies an issue that Welsh Ministers consider could benefit from legislative change, or greater clarification of the law. This includes decisions relating to the Welsh tax Acts, UK predecessor taxes, other taxes, or other laws that may affect the devolved taxes.

This Bill allows Welsh Ministers to make regulations that may have retrospective effect. The use of the power retrospectively will be considered on a case-by-case basis as justification for each may differ, depending upon the purpose in question. This will most commonly be limited to cases where the impact of the regulations is to confer a benefit to Welsh taxpayers. For example, the Welsh Government may want Welsh taxpayers to benefit from a reduction in their tax liability from the same date that a change was introduced in England. The Welsh Ministers may choose to achieve that by adopting, or adapting, the same or a different policy.

However, in the case of avoidance activity, Ministers may wish to be able to announce that the scheme will be closed down by future regulations effective from the date of the announcement. In such circumstances, taxpayers could reasonably expect retrospective changes to be introduced that ensure that they pay the right amount of tax.

I recognise that the use of retrospective legislation requires both policy justification and legal safeguard, and should only be used in situations where it is necessary. This is why the Bill places a duty upon the Welsh Ministers to publish a statement on the use of the power to make regulations that have retrospective effect. And a draft of this statement has been shared with the Finance Committee and the Legislation, Justice and Constitution Committee.

The Bill will provide the Welsh Ministers with an agile tool to protect Welsh revenues raised through devolved taxes, contributing to the drive for stable tax devolution. We have consulted with our stakeholders on the content of the Bill, and I would like to take the opportunity to formally thank all of those who have contributed to developing it. I look forward to the scrutiny process that will now follow and the constructive engagement of organisations who have already contributed and also that of colleagues across the Siambr. Diolch.