We will first of all discuss the first group of amendments, which relate to restrictions on use of the power in section 1. The lead amendment in the group is amendment 1, and I call on the Minister for Finance and Local Government to move the lead amendment and to speak to it and the other amendments in the group—Rebecca Evans. 

Amendment 1 (Rebecca Evans) moved.

Diolch. Before I get into the technical detail, I'd like to take the opportunity to put on record, Llywydd, how much I've appreciated the very constructive discussions I've had with opposition Members and Labour backbenchers through Stage 2 and ahead of Stage 3 on changes to the Bill. I have at all times tried to understand and reflect on the points made, and consider carefully what the scrutiny committees have said when they've looked at the Bill. The results of those discussions and considerations have tangibly changed the Bill in a positive way. The amendments around the review process, the restrictions on the use of the retrospective legislation and the sunset clause demonstrate that this Bill is now very different to that which was first entered into the Senedd, which in itself was very different to that which we had originally envisaged, as shown clearly by the inclusion of the four purpose tests. I hope that Members will acknowledge the progress and the good faith that I have brought to this process, and I have said that if we can successfully get this Bill through, I want us to work in a similarly close way to develop the architecture that can guide the long-term changes to tax legislation in Wales.

But now to the technical detail. Amendment 1, tabled in my name, is a consequential amendment to section 1(2) to reflect the fact that the power in section 1 is also subject to the additional restrictions inserted at section 2(5) and 2(6) by amendments that were agreed at Stage 2. Section 1(2) of the Bill reads as follows:

'But see section 2(4) (restrictions on the power).'

This should read:

'But see section 2(4), (5) and (6) (restrictions on the power).'

Amendment 5, tabled in the name of Peter Fox, seeks to exclude Part 3A of the Tax Collection and Management (Wales) Act 2016 from the scope of the regulation-making power in section 1. Part 3A provides the Welsh Revenue Authority with a way of counteracting avoidance arrangements in relation to devolved taxes—the general anti-avoidance rule, or the GAAR. Whilst it is likely that Welsh Ministers will need to make changes to the operation of the GAAR only in limited circumstances, it is possible that changes at short notice and, of course, subject to the approval of the Senedd may be necessary. 

Prior to the general principles debate, in my response to the Chair of the Finance Committee, I set out clearly a detailed review of the Parts of the TCM Act and provided examples of future scenarios where amendments may be made by regulations under the Bill. This included examples of the need for change in relation to the GAAR, which is most likely to arise in situations where a court rules on the meaning of different provisions and which reduces or widens the scope of the GAAR in an unanticipated or unexpected way. Such a position may arise, for example, where a court takes a view on the interpretation of 'artificial', a key concept in the GAAR, which is broader or narrower than was previously understood and therefore widens the scope of the GAAR or potentially reduces its effectiveness. In these situations, the ability to use section 1(1)(d) to clarify the law urgently would be extremely beneficial to protect the revenues on the one hand and taxpayers on the other. I believe this demonstrates why the ability to amend the GAAR is important and should remain within the scope of the regulation-making power in the Bill. Therefore, I cannot support amendment 5.

The purpose of amendment 6, also tabled by Peter Fox, is to amend the wording in section 2(6) from 'alter' to 'modify' so that regulations under section 1 may not modify any procedure of the Senedd relating to the making of a statutory instrument under any provision of those Acts. I am unsure as to the intention behind the proposed change. My own view is that it appears to be purely stylistic, attempting to create uniformity of language within the Bill. 'Modify' is used elsewhere in the Bill to describe changes that may be made to legislation, and, as such, it's been given a definition, which includes to 'repeal' and 'revoke'. However, as it would be odd to talk about 'revoking' or 'repealing' a Senedd procedure, I decided that using the word 'alter' would be more appropriate in this context. Using 'modify' does not restrict what can be done under the power in section 1 any more than using 'alter' does. As there are salient reasons why 'alter' has been used rather than 'modify', and also as the amendment doesn't actually have any effect, I am unable to support this amendment. 

I will be speaking on amendments 5 and 6, tabled in my name, but, before I start, can I thank the Minister for her engagement throughout this process with me personally and other colleagues across the Chamber? It's been really helpful and welcome, and I do thank you for that, and also the many people who have contributed to the journey of this Bill to this point. 

Amendment 5 removes the general anti-avoidance rule, GAAR, as outlined in the Tax Collection and Management (Wales) Act 2016, from the scope of the regulation-making power in section 1. This amendment follows recommendation 6 of the Legislation, Justice and Constitution Committee. During Stage 2, I moved amendments that removed the whole of the TCM Act from the provisions of section 1 of the tax acts Bill. However, the Minister put forward amendments that alleviated some of my concerns, to an extent, about how this Bill could be used to alter existing tax legislation. I also welcomed additional clarity in the Bill's updated explanatory memorandum about some of the issues that we discussed during the committee stage. Yet, I'm still not fully convinced that the Bill as drafted provides sufficient safeguards to prevent the unnecessary amending of the GAAR via secondary legislation.  

The Minister has previously stated that, despite the likelihood being low, the powers within the Bill could technically be used to amend the GAAR, which the WRA has called an important tool to have as and when required, as it's an effective deterrent at present. Meanwhile, the LJC committee argued that the necessary and appropriate test in section 1(1) would not be a barrier to amending the GAAR, as it would simply need the Minister at the time to consider such a course of action to be appropriate for the test to be met. As such, there is a possibility that the legislation under a future Minister could allow for the GAAR to be amended when it would not be desirable or necessary. For example, as Professor Lewis mentioned during the scrutiny stage, the Bill as drafted could be used to amend the existing anti-avoidance provisions in the 2016 TCM Act to reverse things like the burden of proof, or require a taxpayer to demonstrate that avoidance arrangements are not artificial, instead of the WRA, as the law currently requires. 

In evidence, Dr Sara Closs-Davies wrote that, 

'where there is a process in which changes and decisions can be made, therein exists the possibility that wrong changes and decisions can occur.'

And so it is to be questioned whether any future changes to the GAAR risk making it far less effective than it currently is. 

Finally, amendment 6 is a technical, probing amendment. At Stage 2, the Minister submitted an amendment that inserted two subsections, one of which stated that:

'Regulations under section 1 may not alter any procedure of Senedd Cymru relating to the making of a statutory instrument under any provision of those Acts.'

As introduced, there are a number of restrictions on the use of the regulation-making power in section 1, yet these restrictions are all phrased as a prohibition on modification rather than alteration. As such, it would be useful if the Minister could clarify the choice of the word 'alter' in amendment 2 for the benefit of the record, so that the effect of that amendment is clear for future readers of the legislation. Thank you.

May I also echo the thanks to the Minister and her officials for the way in which they have engaged with us, and also to the finance and LJC committees for their work, and also to the Conservative spokesperson for the way in which we have been able to collaborate on this Bill?

I would just say that we will be supporting all amendments in this group. Amendment 1, as we've heard, is a consequential amendment, so I will expand on that when we get to the more substantial amendment in group 4. We will also be supporting amendments 5 and 6 for the reasons outlined by Peter Fox, but also because of the evidence highlighted during Stage 1 scrutiny. 

The Minister to reply to the debate—Rebecca Evans. 

I thank colleagues for their contribution in this particular section and, as we've heard, amendment 1 is a consequential amendment, and I'm grateful for the support for that from Plaid Cymru, and I would hope that we will have support from Conservative colleagues for that particular amendment.

Then, I think we had the opportunity at Stage 2 to explore recommendation 6 from the LJC committee in detail, and I was able to, as Peter Fox says, bring forward amendments to try and alleviate some of the concerns that were raised at that point. But I hope that, in my opening remarks to this section, I was able to set out why it is still felt necessary to have this power, even though, as I said, it would only likely be used in limited circumstances. There might be changes which might need to be brought in at short notice, but of course subject to the approval of this Senedd.

Then, as I've set out, in terms of the use of the word 'alter' as opposed to 'modify', I think that the amendment tabled by Peter Fox, again, it seems that stylistically the word 'alter' is preferred because it's used elsewhere to describe similar changes. It is a used and understood word in law and, as such, I'm afraid I can't accept the amendment that Peter Fox has brought forward in this regard either. But I'm very grateful to colleagues for their contributions.

The question is that amendment 1 be agreed to. Does any Member object?

No objection to amendment 1.

Therefore, amendment 1 is agreed.

Amendment agreed in accordance with Standing Order 12.36.

Amendment 5.

Amendment 5, is it being moved, Peter Fox?

Amendment 5 (Peter Fox) moved.

Move.

The question is that amendment 5 be agreed to. Does any Member object? [Objection.] Yes, objection. Therefore, we will move to a vote on amendment 5. Amendment 5. Open the vote on amendment 5, in the name of Peter Fox. Close the vote. In favour 24, no abstentions, 25 against. Therefore, amendment 5 is not agreed.

Amendment 5: For: 24, Against: 25, Abstain: 0

Amendment has been rejected

Peter Fox, amendment 6.

Amendment 6, is it being moved?

Amendment 6 (Peter Fox) moved.

Move.

Amendment 6 has been moved. Are there any objections to amendment 6? [Objection.] Yes, there's objection. Therefore, we will proceed to a vote on amendment 6, in the name of Peter Fox. Open the vote. Close the vote. In favour 24, no abstentions, 25 against. Therefore, amendment 6 is not agreed.

Amendment 6: For: 24, Against: 25, Abstain: 0

Amendment has been rejected