We will move on. I call on the Minister for finance to move those motions—Rebecca Evans.

Motion NDM7986 Lesley Griffiths

To propose that the Senedd in accordance with Standing Order 26.11:

1. Agrees to the general principles of the Welsh Tax Acts etc. (Power to Modify) Bill.

Motion NDM7987 Lesley Griffiths

To propose that the Senedd, for the purposes of any provisions resulting from the Welsh Tax Acts etc. (Power to Modify) Bill, agrees to any increase in expenditure of a kind referred to in Standing Order 26.69, arising in consequence of the Bill.

Motions moved.

Diolch, Llywydd. I move the motions. It's a privilege to open this debate on the general principles of the Welsh Tax Acts etc. (Power to Modify) Bill, and to move the motion and the financial resolution. As Members have remarked many times in this Chamber, tax is an important and growing area of the devolution settlement. As a Welsh Government, we need, like every executive, a proportionate and effective suite of tools to manage those tax powers strategically and effectively in order to protect taxpayers and the public finances. This Senedd, like every parliament, needs strong and robust oversight of the use of those tools that can give consent and legitimacy to those powers. That's so vital to the democratic process. While it will take more than this Bill to get us to that position, I do believe that this proposed legislation is an important first step along the road to the coherent and transparent system that we need to support tax devolution in Wales.

I'd like to begin by thanking the Chairs and the Members of the Finance Committee and the Legislation, Justice and Constitution Committee for their thorough scrutiny of the Bill during Stage 1, and their comprehensive reports. I will say a little more in a moment about the ways in which I think we can positively work together to strengthen the Bill during its passage through the Senedd. I'd also like to thank all of those who have engaged with us and who have taken an active role in progressing the Bill, providing their expertise, their challenge and their perspective. That has contributed to our thinking as we have been developing the Bill. Both committees have made a number of important recommendations, the majority of which I am pleased to accept. Given the detailed nature of both committee reports, and the number of recommendations made, it's not possible to respond to each one of them individually today. I will therefore be writing to the committee Chairs following the debate.  

I'll begin with what I believe is the common ground among all of us—that is, ensuring that we have effective arrangements to protect revenues as a result of changes that impact on our devolved taxes. The Bill is intended to afford that timely protection while respecting the Senedd and its proper oversight role. This Bill is not the final word or a longer term answer to how we make urgent changes to tax legislation. Rather, it is a pragmatic step to take now while we work through the full implications of tax devolution in Wales. As I have said, tax devolution itself is a relatively recent constitutional change, with our devolved taxes only commencing operation four years ago. As that devolution matures, I want to work with this Senedd to move us towards an architecture for making tax changes that is right for us here in Wales. Ultimately, this may look closer to the UK arrangements of an annual finance Bill, although this in itself would not offer a full solution. That will be for us working together to work out what arrangements and instruments are right for Wales.

I've listened to and reflected carefully upon the important constitutional points made in relation to this Bill, and in particular those by the Legislation, Justice and Constitution Committee on the separation of the powers between the legislature and the executive. That consideration has significantly influenced the amendments that I intend to bring forward in the upcoming scrutiny stages. I believe that this legislation can be seen as an important shorter term vehicle while we consider those longer term solutions that must be thoroughly researched and evaluated—work I think that we can do together as a Welsh Government alongside this Senedd and its committees, particularly in the context of an enlarged Senedd. As such, I'm pleased to accept the recommendations of both committees to require the Welsh Ministers to publish a report on the operation and the effect of the Act. I propose to publish this report at the start of the next Senedd term.

In addition, I'm prepared to go further. My intention is to bring forward an amendment during the passage of the Bill that no new regulations may be made using this regulation-making power after five years of the Bill receiving Royal Assent. However, I do think that it is important to provide the Senedd with the opportunity to extend the life of the Act by up to a further five years if that Senedd considers the powers should remain in force for that final extended period. This will be achieved by Members voting to approve an Order made by the Welsh Ministers. These actions are intended to ensure that we are ready to take an agreed next step on our devolution journey at a specified future point. Depending on what happens between now and then, if the number of devolved taxes increases or if there is a larger volume of tax legislation amendments, then there may well be case for a regular finance Bill. However, we still need to consider a mechanism for making urgent changes outside of any Welsh finance Bill cycle. Crucially, I commit today to working with committees to think through these important questions and challenges.

I'd like to turn to another key area that the Government agrees gives rise for the need for an amendment. I've carefully considered the views of the committees and stakeholders in regard to the ability to restrict retrospective legislative changes back to the date of initial announcement. I'm pleased to accept the guiding principle and intend to bring forward a Government amendment to restrict the ability of the Welsh Ministers to legislate retrospectively to the date of a Welsh Government announcement in cases where a change, and that is a monetary cost, may impact negatively on taxpayers. However, I consider any such restriction should still allow the Welsh Ministers to use the power to make changes with a retrospective effect further back than the date of any announcement where that change reduces the tax charged, for example if responding to a UK budget change would ensure that our taxpayers can benefit from the reduction at the same time as taxpayers in England. Overall, I've considered carefully and accepted the key recommendations of the committee reports and I intend to make important amendments to the Bill as a result.

Moving to the recommendations that I'm not able to accept, I do intend to write in response to each of these following the debate. I consider that some of those recommendations would encroach on the fundamental aim of the legislation to provide an agile and flexible mechanism to respond at pace to external circumstances that affect our Welsh tax Acts. There are others to which I have responded in other ways; in particular, I set out to the Chair of the Finance Committee examples of how the power may be used for the Welsh tax Acts in relation to each of the four purpose tests, for example. In conclusion, Llywydd, I accept this Bill cannot and should not be seen as the final word on the architecture that we need to make changes to tax legislation. However, the proposals that I have set out today seek to ensure that we can deliver a pragmatic legislative solution for the current circumstances on our devolution journey while we grapple with these longer term questions. I urge Members to agree the general principles and the financial resolution of the Bill. Diolch.

I call on the Chair of the Finance Committee, Peredur Owen Griffiths.

Thank you very much, Llywydd. I'm pleased to be able to speak in today's debate to outline the Finance Committee's main conclusions and recommendations in relation to the Bill. As the Bill's sole purpose is to delegate a power to the Welsh Ministers to amend Welsh tax legislation in certain circumstances, its provisions have been fully considered by the Finance Committee and the Legislation, Justice and Constitution Committee, and both committees have come to a similar conclusion.

I'd like to thank the Minister for the meeting last Friday to discuss our reports and recommendations. I very much welcome her constructive approach. 

I'll begin with our views on the general principles. As a committee, we fully support the principle that Ministers need the ability to respond to external events to protect Welsh revenues raised through devolved taxes. However, much of our deliberations has been centred around the appropriateness of delegating a regulatory-making power to Ministers to achieve this objective, as it results in less scrutiny and surrenders the Senedd's legislative role.

The evidence we received focused on the key principles that tax law should be set out in primary legislation, should be subject to detailed consideration and debate, and should provide certainty for taxpayers. And while the Minister has been keen to point out that the Senedd has previously granted powers to Ministers to amend tax legislation through regulations, that does not in itself justify the approach proposed in the Bill before us in this Senedd. We are disappointed that the Welsh Government has not given serious consideration to developing alternative ways of amending devolved tax legislation at pace. In particular, the Minister could have pursued a mechanism for urgent changes to the law to be made on a temporary or provisional basis by a resolution of the Senedd, with subsequent primary legislation providing permanent effect. Such an approach would allow the Ministers to respond quickly to protect tax revenues and ensure an equitable balance of control between the Senedd and the Welsh Government. This would also have been useful preparatory work for the future introduction of a legislative budget process. Whilst the Minister considers that a legislative budget process is disproportionate at this time, we need assurances that work to develop it will not be delayed if this Bill progresses, and we believe further devolved taxes should be designed with a legislative budget process in mind.

We did not reach a unanimous decision, with three of our four Members supporting the Bill's general principles. Peter Fox did not support the Bill progressing beyond Stage 1, and I'm sure he'll outline his reasons for this in his contribution. Some of us shared Peter's concerns but, on balance, we concluded that these concerns did not warrant the committee recommending that the Bill should fall at this stage. Nevertheless, we identified a number of areas where improvements should be made to the Bill. Firstly, we found it challenging to form conclusions on the four proposed purpose tests. The Minister told us that the scope of the power is deliberately constrained and set out with absolute clarity the circumstances in which it would be used. However, serious concerns were raised with us about the breadth of aspects of the power, and we were advised that it could be open to abuse. 

The Bill will allow the Welsh Ministers to amend any provision of the Welsh tax Acts other than the provisions relating to the establishment of the Welsh Revenue Authority and regulations amending tax rates and bands of devolved taxes. During our scrutiny, we expected the Minister to provide specific examples to demonstrate how the power could be used to modify the Welsh tax Acts in practice. However, we were told it was not feasible to anticipate every future circumstance that may give rise to an amendment. This provided us with little opportunity for adequate scrutiny, and so we pressed again for examples to inform today's debate. I'm pleased that the Minister has now provided examples, and note that she is now considering excluding Part 9 of the Tax Collection and Management (Wales) Act 2016 from the scope of the Bill. This information would have been helpful at the outset to enable proper scrutiny, but we are where we are. 

The key consideration has been the provision in section 2 of the Bill permitting Ministers to make regulations with retrospective effect. Witnesses voiced concerns that this undermines a fundamental principle that the law should be certain. While we accept that the Welsh Government may need to mitigate the risks to public funds, great care and a compelling case is required to legislate retrospectively. To protect taxpayers, we recommend that the ability to make regulations with retrospective effect is limited on the face of the Bill for three of the four purposes. I note the Minister's intentions to bring forward the amendments limiting the ability to legislate retrospectively and look forward to seeing the detail of her proposals.

I now want to move on to the Senedd's approval of regulations made under the Bill. This includes the made affirmative procedure, subject to the Senedd's approval within a maximum period of 60 days. We will expect the Welsh Government to put forward a compelling case to justify the need to dispense with prior scrutiny and approval, especially in the case of regulations with retrospective effect. Given our concerns surrounding the broad nature of the power sought and the ability to change Welsh tax laws retrospectively, we urge the Minister to strengthen the approval process by including a minimum time period for scrutiny of any regulations by the Senedd.

We also considered the financial implications of the Bill and we were disappointed with the lack of financial information presented. With no direct costs identified and indirect costs described by the Minister as nebulous, we were unable to draw any meaningful conclusions on the financial impact of this legislation. We will expect any future regulations to be accompanied by a full and robust regulatory impact assessment.

Finally, we welcome the Minister's willingness to review the legislation. We recommend that the provisions in the Bill be reviewed after an initial two-year period and a periodic review every five years. An early review is especially important given the limited information we have to be able to scrutinise and uncertainties around how the power in the Bill could be used. It will also assist the Senedd to maintain focus on whether this development in our tax law is appropriate.

Llywydd, Wales waited 800 years for powers to raise taxes. This Chamber should not give those powers away without proper thought and consideration.

In closing, I would like to thank everyone who has contributed their views to assist us in this important work. I'm also very grateful for the advice and guidance from our expert adviser, Charlotte Barbour, during our consideration of this complex subject area. I look forward to receiving a formal response to the recommendations. Thank you very much.

Chair of the Legislation, Justice and Constitution Committee, Huw Irranca-Davies.

Thank you, Llywydd. I welcome this opportunity to participate in this debate on the general principles of the Welsh Government's second Bill of the sixth Senedd. Our report came to four conclusions and we made 18 recommendations.

I'd like, in my opening remarks, to thank my committee members and the clerking team for the attention that they've put to this particular Bill. But I'd also like to thank the Minister for arranging a meeting with me and with the Chair of the Finance Committee last Friday to discuss our respective reports. We thought that was helpful and constructive, and I very much welcome, again, the constructive approach that you adopted both in that meeting and also that you've signalled again in your opening remarks here today to accept some of our recommendations, indeed, that were aimed at improving the Bill. In particular, Minister, your acceptance of recommendation 16 will guarantee that committees have 28 days in which to scrutinise regulations subject to the made affirmative procedure.

We also welcome the Minister's response to addressing one of our biggest concerns with the Bill, namely section 2(1)(c), which permits regulations under section 1 to make provision that has retrospective effect—an issue that was drawn to the attention of the Chamber by my fellow Chair. Whilst we concluded that law having retrospective effect should be made using primary legislation, the Minister's commitment to table an amendment to constrain this power, as she has outlined, does, indeed, improve this current Bill.

There remain, however, some important points that need to be highlighted. We concluded that the Bill does not represent an appropriate legislative vehicle to make changes to the Welsh tax Acts. We considered that the level of delegated power in the Bill is inappropriate and we're not persuaded that the extent of that power has been adequately constrained by the inclusion of the four purpose tests. We do recognise the need for the Welsh Government to act in a timely manner to avoid negative consequences to public finances. However, we consider that the balance in this Bill is tilted too much in favour of the Welsh Government's desire to respond quickly and it risks marginalising the democratic mandate of the Senedd. So, we do believe, as a point of principle, that the Welsh Government should use primary legislation to amend the Welsh tax Acts, for example through a finance Bill, annual or otherwise, or a special purpose Bill, subject to an expedited procedure. We also believe that the Minister has been a bit too quick to discount an approach akin to the use of the Provisional Collection of Taxes Act 1968 in the House of Commons, involving a motion of the Senedd, subsequently being given permanent effect by the use of a Bill subject to an expedited or other bespoke legislative procedure. We don't see any reason why the development of an appropriate legislative procedure could not have taken place alongside an accompanying Bill as it passed through the Senedd. So, as our report shows, the Welsh Government adopted such an approach in relation to consolidation Bills. The process of developing a procedure, led by the Business Committee, occurred in parallel with the Senedd's scrutiny of the Legislation (Wales) Bill. An approach used in primary legislation could have been developed in such a way so as to enable the Welsh Government to react quickly to external events and safeguard public finances, as the Minister wants, whilst at the same time respecting the legislative supremacy of the Senedd. It would certainly have been preferable to an enabling Bill, delegating an extensive Henry VIII power to the Welsh Ministers to amend existing primary legislation on tax made by previous Seneddau.

So, for these reasons, our first recommendation suggested that the Minister should table an amendment to the Bill to require a statutory review of the regulation-making power in the Bill within two years of Royal Assent. Our second recommendation suggested the inclusion of an appropriate sunset provision, such that no new regulations may be made under the power in section 1 after July 2027. So, we do welcome the Minister's commitment to table amendments to require the Welsh Government to report on the operation of the Act, as the Minister has mentioned today, and to include a sunset provision, albeit to different timescales. We hope that this will enable the Welsh Government to develop, at the very least, an improved approach to amending devolved tax legislation, potentially linked to the 1968 Act and, hopefully, without the need to extend the sunset provision to 2032.

A key theme of our other recommendations focused around changes to the Bill that would limit the extent of the power provided to the Welsh Ministers to make regulations. So, for example, we recommended that the meaning of 'tax avoidance' should be limited by reference to the general anti-avoidance provision, set out in Part 3(a) of the Tax Collection and Management (Wales) Act 2016. Without such an amendment, the Welsh Government will gain the ability to decide what it wants to legislate for in relation to any tax-avoidance activity.

I am coming to a conclusion, Llywydd. My apologies for going over slightly. The Bill contains a power for the Welsh Ministers to modify the Welsh tax Acts in responding to 'decision of a court or a tribunal'—the purpose under section 1(1)(d). This purpose is of genuine concern to the committee, not least because we were told that the power was deliberately wide to capture all eventualities, because we can't predict at this point the future scenarios where the provision might be used. Now, we believe the changes to the law that may be needed as a consequence of a decision of a court or a tribunal should be achieved through primary legislation, and we are disappointed, therefore, that our recommendation—that this purpose be removed from the Bill—has not been accepted yet.

In conclusion, I welcome some of the steps the Minister has taken to address our concerns, and I welcome the Minister's offer to write to the committee on our remaining concerns and to work constructively with both committees. We hope that, in the near future, Senedd Members will have the ability to scrutinise primary legislation when changes need to be made quickly to the Welsh tax Acts. Diolch yn fawr iawn, Llywydd.

Thank you, Minister, for your statement, and I welcome the positive messages you've given us this afternoon and a suggested move on amendments. Llywydd, unfortunately, though, the Welsh Conservative group is not in a position to support the general principles of the Welsh tax Acts Bill, and so we'll be voting against both motions before the Senedd today.

When the Bill was introduced last year, I stated that I had some sympathy for the Minister—budgetary processes and taxation are of course very complex things, and this complexity has only increased during recent years. However, during the extensive consideration of this Bill, and I have been fortunate enough to sit on both committees, under the fantastic leadership of our two Chairs, it's become clear to me that the Bill as drafted poses some significant questions and challenges regarding the role of the Senedd in developing taxation legislation. As stated by the LJC committee, the Welsh Government's chosen approach

'is contrary to established parliamentary practice and principles associated with good law-making.'

The chartered institute of taxation stated that their

'starting point is that tax law should be set out in primary legislation', as it's subject to more scrutiny and debate than secondary legislation, as well as affording stakeholders the ability to properly be part of the scrutiny process in a more transparent manner. Yes, I understand that, at times, changes need to be brought forward quickly to respond to external events, but I don't believe that such a justification can be used to dilute the powers of the Senedd in determining tax policy.

The Minister has repeatedly emphasised the four tests contained within the Bill, which seek to constrain its provisions and how they are used by Ministers, but, during scrutiny, questions were raised about the appropriateness of some of these tests. For example, Dr Sara Closs-Davies suggested that the term 'tax avoidance' needed to be defined in the Bill as it has a wide definition that is problematic. Professor Emyr Lewis further stated that the drafting in relation to tax avoidance

'is much broader than simply a loophole-closing provision', highlighting that the provision, as well as for the purpose of responding to a court or tribunal decision, could be used to enact changes far wider than as stated by the Welsh Government. Professor Lewis highlighted that the purpose test as drafted could allow Ministers

'to achieve routine policy changes, significant or otherwise', including the potential to introduce a new rate of tax under purpose (c).

Meanwhile, the Institute of Chartered Accountants in England and Wales raised concerns about the powers within the Bill that allow Ministers to impose or extend a liability to a penalty under section 2(1)(b). They question what the power is

'going to do that's different to what we've already got in our primary legislation? It's not at all clear'.

Put simply, Llywydd, are we risking making a complex area of law even more murky and difficult to follow? The overarching theme, I sense, is that this Bill does need to be more limited, and I welcome suggestions for a sunset clause to be inserted into the Bill to allow for a more appropriate mechanism to be developed as well as a need for a statutory review of the regulation-making powers within this Bill.

There must also be more checks and balances in the use of the provision to change taxation law retrospectively, which goes against the key principle of certainty when developing such legislation. At the very least, any use of these retrospective powers needs to be given Senedd approval and is limited to no earlier than the effective date of the change to the predecessor tax.

To conclude, Llywydd, I believe that the Bill as drafted could open up a Pandora's box of unintended consequences for not just Welsh tax legislation, but for the supremacy of the Senedd in legislating more broadly. I believe and I know that the Minister is engaging constructively with the full suite of recommendations made by the LJC and the finance committees. It is important that if the Government really wants the support of the whole Senedd it works with Members of all sides to strengthen the Senedd's role in developing taxation law. Thank you.

Plaid Cymru will also be voting against this Bill this afternoon. We as a group understand the rationale behind this Bill and the importance of responding swiftly, as required, to complex taxation issues, and I'm very pleased to hear the willingness of the Minister to discuss and to listen to the concerns of both committees and to respond positively to that.

Despite this, the concerns are still too great for us to support the Bill, the concerns that this Bill undermines the powers of the Senedd. Although the Bill appears to be a practical piece of legislation, it does take powers following full scrutiny away from our Senedd, and, in that regard, I think we could draw a parallel between the increasing use of LCMs in the Senedd, which is the cause of so much concern for Plaid Cymru and Senedd committees, the LJC committee, for example. Although the LCMs are convenient or they appear convenient, they undermine the role of this Senedd. And in the same way, this Bill undermines the powers and role of our legislature.

I'm afraid, Minister, that this Bill comes with a similar stamp to the LCMs. We should come together as a Senedd to stop the carving out of the powers of the legislature as contained within this Bill.

Because this is a question of principle. As a Senedd and as Members of the Senedd, we need to ask each other to what extent we are content to intervene in the democratic mechanisms of such a young legislature. I understand the Minister's point when she talks about a legislature that is still maturing, but we're a young legislature—so early on in the history of our legislature, that we are willing to intervene in the powers and the democratic mechanisms of our Senedd.

As the LJC committee said, as the Chair said earlier, changes to tax law shouldn't be made through subordinate legislation in a retrospective manner. This is entirely contrary to the good practice and the acknowledged practice in these isles and internationally. The acknowledged way to do it is to deal with such issues through primary legislation, because as with the LCMs, retrospective changes to tax law will mean more limited scrutiny. For example, there's no way to amend relevant provisions through subordinate legislation. That could be done through primary legislation.

This Bill, therefore, is contrary to one of the cornerstones of the constitution of these isles. Taxation powers should be under the care of the legislature, not of the Government, and people throughout the centuries have battled for that fundamental right. This Bill will allow tax Acts for Wales that have already been passed by the Senedd to be amended through subordinate legislation. This is entirely contrary to good parliamentary practices worldwide.

Another key concern, of course, is the proposal for Welsh Ministers to make retrospective changes to taxation legislation. This is very poor practice in legal terms. Any first-year law student will tell you that, and such powers have an impact on the certainty and assurance with regard to the law. As Professor Emyr Lewis said:

'If the law can be changed retrospectively, then it means that something which was lawful at the time it was done can be made unlawful, and someone can suffer consequences which they would not have expected to suffer. That makes for uncertainty in the law.'

And this, Llywydd, is entirely contrary to the commitment made by Welsh Government to make Welsh law accessible to everyone.

Some of Wales's leading legal and constitutional minds have raised concerns and fundamental doubts about this Bill. Amending the Bill before us isn't enough, we need to stop the Bill as it currently stands. We need to vote against it and, by doing so, ensure that the Government reconsiders legislation and the mechanisms that they need to achieve their desired aim. Thank you.

As a member of the Senedd's Finance Committee, I wish to thank the Chair of our committee, Peredur Owen Griffiths, for his stewardship, and to my fellow committee members, Mike Hedges and Peter Fox, for their solid work on the committee. I also want to take this opportunity to place on record my thanks to my colleagues Jack Sargeant, Carolyn Thomas and Alun Davies, who have ably substituted for me at times during our period of scrutinising this Act.

I agree with the Minister when she outlined the generic need for the Bill. The Minister told the committee, and I quote:

'the vulnerability, really, of the Welsh Ministers in respect of being able to respond appropriately to tax policy changes made by the UK Government is quite clear, and Welsh Ministers should be in a position to provide near immediate responses to certain external events'.

We have seen that the Chancellor of the UK is adept at making extensive changes to tax policy, changes with cursory thought for the consequence on Welsh taxation measures. So, I was heartened that the Minister has made explicitly clear that these powers would only be used to respond to specified external circumstances in her letter, and did not anticipate the powers being used regularly. However, I also note and very much welcome the intended amendments, as articulated by the Minister today. We always have to be mindful of the balance between Executive power and the powers of the legislature—this fine balance, diversified further in a United Kingdom with a maturing devolved structure of governance. The committee, I know, was keen for an evidence basis, and I welcome the Minister's letter to the Finance Committee of 22 April, which outlines the extensive and specific detailed information that the committee were rightly seeking. I noted the headline from the Chartered Institute of Taxation's response to the committee's report, which stated that the committee gave 'cautionary backing' to the Welsh Tax Acts etc. (Power to Modify) Bill—in essence, good governance. The Welsh Labour Government responded agilely and flexibly to external events, whilst the Senedd's scrutiny functions and committee forensically carried out their work and analysis.

Llywydd, with the stated amendments, I do support the general principles of the Welsh Tax Acts etc. (Power to Modify) Bill, and I also wish to take this opportunity, finally, to thank the Minister, Rebecca Evans, for the manner in which she has brought this measure forward, her adaptive and constructive approach during this process. Diolch yn fawr.

The Minister for finance now to reply to the debate. Rebecca Evans.

Diolch, Llywydd, and thank you to all colleagues for the comments that they've made in the debate this afternoon. I think that, undoubtedly, there are some real points of detail that, as we progress through the scrutiny process—and I do hope that we are able, after today, to progress to Stage 2—we will need to further debate and work on and consider together.

I have set out today why I believe the Bill is important, and in particular to protect the vulnerabilities of our devolved taxes and the Welsh Government's budget. I have listened really carefully to the views of committees and other Members in response, and set out the significant changes, I think, limiting the effect and the longevity of the legislation.

I think it's also worth reflecting that I've also moved considerably since we even set out the original proposal for the legislation. I responded to the outcome of the consultation by reworking the scope of the regulation-making power to include four purpose tests, which a number of colleagues have referred to this afternoon. That really did, I think, move us a long way in the first instance from our first proposals, which were to introduce quite a wide-ranging and wide regulation-making power. But the four purpose tests now really do narrow that down. It's limited to any of the four specific purposes, which include ensuring that the landfill disposals tax and land transaction tax are not imposed where to do so would result in non-compliance with any international obligations; to protect against tax avoidance in relation to landfill disposals tax and land transaction tax; to respond to changes in the predecessor UK taxes—that is, stamp duty land tax and landfill tax—which could impact on the amount paid into the Welsh consolidated fund; and then, finally, to respond to the decisions of the courts or tribunals that affect, or may affect, the Welsh tax Acts, or the regulations made under them. So, I think that we have moved considerably through the scrutiny process thus far to try and address concerns. And of course, these regulation-making powers can only be used where Welsh Ministers consider it necessary or appropriate to do so, and I know we had some good debate in committee on that particular point. It may be necessary at certain points to make these regulations, but, actually, there may be other points where it's appropriate to do so. So, it might not be necessary to confer benefits on Welsh taxpayers, but it might be appropriate to do so, and that's one of the reasons why we've introduced that particular test. But I know there'll be further discussions with committees, hopefully, if we're able to progress to those discussions.

I think it's also worth us highlighting and considering what will happen if the Bill isn't allowed to go forward, and that we don't have these powers. I think that the vast majority of colleagues at least recognise that there is an issue here and that there is a need for the Welsh Government to be able to respond in an agile way. The Bill is essential to provide Welsh Ministers and the Senedd with the necessary powers to address those external events. And actually, they're external events of course that the UK Government itself wouldn't need to address because they are related to the UK Government's tax decisions that they make themselves. And that, I think, is an aspect of the devolution settlement that's significant and that we must have the tools to be able to address in a quick and agile manner. And let's remember as well that this Bill is about protecting the Welsh budget. It's also about ensuring that we're able to confer benefits on Welsh taxpayers in a timely manner, which I think our Welsh taxpayers would expect us to be able to do for them.

So, we do need a mechanism now, I think, to respond to those external scenarios as they arise, and ones that might impact on the budgets. And without the legislation, to be frank, we are still going to have to find ways in which we respond, and there is likely to be an attached cost and other concerns in relation to that. In most cases, that would mean that we would have to respond using emergency legislation, and there are various drawbacks to that approach. At the moment in Wales, there is no current equivalent mechanism to the Provisional Collection of Taxes Act 1968 in Welsh law, but, of course, as we have these further conversations about the architecture that we might have in future, then that certainly might be something that we could be considering together in that regard.

If we aren't able to have the powers within this Bill, and if this Bill isn't able to go forward, it does mean that we just have to live, potentially, with some changes imposed on the Welsh Government, which could have some significant impact on our budgets. Or, alternatively, it might mean responding to a change over a longer period of time, using primary legislation. Or, if Welsh Ministers do have secondary legislation powers in the Welsh tax Acts that we are able to use, we can use those, but they are largely subject to the draft affirmative procedure and they won't, of course, cover all of the potential changes that could be required. The most likely scenario, I think, would be that we would need to respond using emergency legislation. And, of course, there are some drawbacks to that approach as well. And I do hear what colleagues say about the importance of primary legislation, but I do think there's also some merit in considering whether, in all cases, primary legislation does necessarily give to the best scrutiny. Emergency Bills, for example, can pass in a single day, and I do think that a comparison between the scrutiny that the primary legislation to effect the stamp duty land tax holiday across the border in England during the pandemic received and the scrutiny that the Senedd gave to our changes to the rates and bands, which were made by affirmative regulations around the same time, is illustrative.

The SDLT legislation was introduced on 13 July, albeit having been subject to a Provisional Collection of Taxes Act resolution on 8 July, and it was passed on 17 July. But our secondary legislation was made on 24 July, came into force on 27 July, and was, in large part because of the summer recess, approved by the Senedd on 29 September 2020. And the Finance Committee did undertake scrutiny of that. I gave evidence to the committee and, of course, the Finance Committee was able to call on expertise externally, to take external evidence and so on, if it had wished to as well. So, I think that there is a lot to be said for the scrutiny afforded by secondary legislation as well. But these are debates I think that we will continue to have and I hope that we are able to have. And I would urge colleagues to allow this Bill to proceed to the next stage, to Stage 2. I have committed, of course, to taking steps with committees to find an appropriate longer term legislative solution to the issues that the Bill seeks to provide, and I just want to confirm to the Chair of the Finance Committee that I commit that that work would be in no way delayed if this Bill is able to progress.

And just finally, again, Llywydd, I ask colleagues to allow this Bill to pass to Stage 2 so that we can continue to work in a really constructive way, between Welsh Government and committees, to ensure that we do have the ability to protect the Welsh finances and also to ensure that Welsh taxpayers receive timely benefits, and also in doing so of course, importantly, ensuring that we respect fully the role of the Senedd. And I ask colleagues again to allow this to proceed to Stage 2. Diolch yn fawr.

The proposal therefore is to agree the motion under item 12. Does any Member object? [Objection.] Yes. Therefore, I defer voting under item 12 until voting time.

Voting deferred until voting time.

The next proposal is to agree the motion under item 13. Does any Member object? [Objection.] Yes, again there is objection, therefore we will defer voting until voting time. 

Voting deferred until voting time.