5. What advice did the Counsel General give to the Minister for finance on the constitutional implications of the introduction of the Welsh Tax Acts etc. (Power to Modify) Bill? OQ57621

Thank you very much again. I am satisfied that the constitutional implications of the Bill have been appropriately scrutinised and evaluated. Powers included in the Bill as currently drafted are subject to four purpose tests, which may only be used where the Welsh Ministers consider it appropriate. These powers are sufficiently constrained. 

Diolch yn fawr, Cwnsler Cyffredinol. You're quite right about the wide-ranging powers when Ministers feel that it's appropriate, but I'm sure you also remember, back to your student days, Cwnsler Cyffredinol, being taught that, generally, laws should only be applied prospectively, rather than retrospectively. And I'm also sure, in constitutional lectures, you were taught about the importance of parliamentary scrutiny. Now, whilst this Bill has many sensible features, such as the ability to change the tax process quickly to comply with international obligations, it limits the scope of scrutiny by removing the Senedd's lock. The Senedd lock is important, where power to change the Act was only contingent on Senedd approval. That's gone. Now, the broadness of the Bill fundamentally alters location of power in the Senedd to Ministers, and additionally it grants Ministers the powers to alter Acts retrospectively. That's clearly undermining the rule of law by creating uncertainty within the law. Now, we often criticise the Westminster Government for undermining the rule of law, but it is true about the Welsh Government in this case. In light of that, what safeguards will you introduce in this Bill in order to prevent the erosion of scrutiny and to prevent the erosion of the rule of law? Diolch yn fawr.

Thank you for the question. The Member raises a very important point and it's a point that has been very carefully considered; I've applied my mind to it and I know the Minister for finance has as well. And, of course, the Bill is, I think, at Stage 1 of the scrutiny process. I know the finance Minister gave evidence to the Finance Committee in the first session, I think, last week, and certainly there's another session next week, and I think is due to give evidence to the Legislation, Justice and Constitution Committee.

The first thing is really what the Bill is about. What the Bill does is it enables changes to be made to the Welsh tax Acts by regulations where Welsh Ministers consider that those changes are necessary or appropriate, and where they're required to have effect immediately or shortly thereafter. So, basically, where there are a number of external circumstances that can happen, it's about protecting the integrity of the Welsh tax system to changes that may occur. 

And you're right—the issue of the lock is an important one. I can't remember discussing anything like this when I was a student. Mind you, that was over 40 years ago, so perhaps your memory is a bit fresher than mine. But it is an important constitutional point, and I know it's one that's been the subject of a certain amount of commentary—that is, that a change would have to come before the Senedd for the power to be unlocked to enable it to actually be used. I think the difficulty with that is the immediacy of a change that might need to be made, and I think there's broad recognition that there is a need to have the power. But, you're absolutely right that, of course, it is a significant power. Any power to a Government to make changes, and potentially retrospective changes, is significant and requires significant scrutiny.

The approach that is being taken in respect of the way to do it is really to have a four purposes test to it so that it is there to ensure that it can deal with issues that arise unexpectedly, suddenly et cetera with regard to tax avoidance, or to comply with international obligations, or to respond urgently to court or tribunal decisions, or in fact to things that happen at a UK Government level that mean we need to actually respond. And, in some ways, it's a little bit like the COVID regulations, isn't it, in that they're made, they take effect et cetera, and so you have the made affirmative procedure or, potentially, the draft affirmative procedure being looked at.

I think what I can say is that you are absolutely right to raise the point. It is a matter that has to be very carefully examined. The finance Minister is attending the various committee scrutiny sessions in order to do that. And, no doubt, this will come back before this Chamber. I think, in terms of the balance and my understanding of what is needed and the urgency with which it is, from time to time, necessary to act, what is contained within the Bill I think recognises those significant constitutional issues that have to be addressed. But, of course, the scrutiny process will continue and the Minister for finance will obviously engage within that.