Group 3 is next, and these amendments relate to the review of the Act. The lead amendment in this group is amendment 8, and I call on Peter Fox to move and speak to the amendment. Peter Fox. 

Amendment 8 (Peter Fox) moved.

Diolch, Llywydd. Amendment 8 requires a review of the Act two years after coming into force, as well as four years after coming into force. For brevity, I won't repeat some of the detailed discussions that we've had with the Minister during Stage 2. However, during the passage of the Bill, numerous issues have been raised about the appropriateness of Welsh Ministers using secondary legislation powers to amend primary legislation. I still do believe that there are more appropriate ways of amending and updating taxation legislation, something that I will come on to in a few moments. However, the amendment seeks to work with the aims of the Bill by ensuring that there are sufficient checks and balances on the operation of the Act by providing for a review two years after coming into force, as well as a review after four years, as already drafted in the Bill. 

The inspiration behind this amendment relates to an idea that the Member for Swansea East mentioned in the previous stage, that the operation of the Act should be looked at when its powers are first used. By having a statutory review after two years, the amendment seeks to give Ministers time to use the Act, and for the consequences of such usage to be realised. The initial review would allow Ministers and the Senedd to identify any issues as a consequence of the Act, and to take steps to rectify these early on in the Act's operation.

Although we've heard the argument that the Act is intended to be a last resort, I would think it's unlikely that it will be just left on the shelf to gather dust and not used at all. As we've seen with other Bills, Ministers often have a suite of secondary legislation awaiting in the wings once Royal Assent has been given. And so, I do think a review after two years is necessary and responds to Mike Hedges's suggestion.

Presiding Officer, Members will wish to be aware that amendment 9 is a consequential amendment to amendment 8; if amendment 8 is not carried, this amendment will not be moved.

Amendment 3, tabled in the name of Llyr Gruffydd, requires the Welsh Ministers to consider alternative legislation mechanisms for making changes to the Welsh tax Acts when reviewing the operation of the Act, as required in section 6. In evidence to the Finance Committee, Sir Paul Silk noted that the Bill, and I quote:

'is an example for me...of a more general concern that I have about the way in which the Executive is taking over functions that I think properly belong to the legislature.'

Many stakeholders therefore have called for alternative legislative mechanisms to be developed, such as an annual finance Bill. This conclusion was supported by the previous Finance Committee in the fifth Senedd. Such a process could also reduce the need for the use of Henry VIII powers, and to ensure that any changes to tax legislation are transparent and properly scrutinised.

Finally, amendment 4, also tabled in the name of Llyr Gruffydd, ensures that the Welsh Ministers consult the Senedd and other stakeholders when reviewing the operation of the Act under section 6. This amendment ensures that there is greater scrutiny regarding the operation of the Act, as well as any decision made by Welsh Ministers to publish regulations to extend the operation of the Act. It also responds to concerns that Ministers will merely extend the lifetime of the Act without considering whether alternative mechanisms for amending primary taxation legislation are more appropriate.

Presiding Officer, I call on Members to support amendments 8 and 9, tabled in my name, as well as amendments 3 and 4, tabled in the name of Llyr Gruffydd. Thank you.

The Finance Committee, and many stakeholders, strongly believed that including a retrospective review that was robust was good practice, and would be something that would help to ensure that the objectives of the legislation were delivered in accordance with expectation, and also that there is value for money when it comes to what is delivered. Now, that of course is something that the Finance Committee has recommended regularly in the past, certainly when I was Chair of the committee—that there should be a review of this kind in all Bills, as common practice.

But in this area specifically, as the devolution of taxation is a relatively new development in Wales, and also as the Welsh taxation system matures, it's even more important that the Senedd can be confident that any developments are proportionate and comply with parliamentary good practice and the best democratic principles. That's why I'm supporting amendments 8 and 9, which propose that we should go further than the Minister has committed to, namely that the Senedd must do more work in terms of oversight of taxation powers.

Now, as this is an enabling Bill, with powers delegated to the Minister, it will be crucial to assess how the legislation operates on a practical level, as well as its impact on taxpayers and devolved taxes. There is consensus, I think, around the need to review the Act after four years, and that in turn would feed into the consideration as to whether the legislation should be extended to five years, or beyond five years. But as the committee suggests, and as we've already heard, there should be an initial statutory review of the Bill two years after Royal Assent, in order to scrutinise the conclusion of that review before the end of the sixth Senedd, namely this Senedd term. So, we will be supporting amendments 8 and 9 for those reasons.

Now, my amendments in this group, amendments 3 and 4, respond to a recommendation in the Stage 1 report of the Finance Committee. The committee suggested that the Bill be amended to note that the statutory review of the implementation and impact of the legislation by the Welsh Government would include assessments of the nature and effectiveness of any regulations made under section 1(1) of the Act; that it assesses the impact of the Act on taxpayers and on devolved taxes; that it also assesses the appropriateness of the powers to make regulations provided to Welsh Ministers under the Act; and, most importantly in the context of this group of amendments, that this review would also assess alternative legislative approaches to making changes to the Welsh tax Acts and the regulations made under those—in other words, that the review would go further and would look at the broader legislative picture in this area.

My hope in that regard is that looking at alternative legislative mechanisms in this area will promote and contribute to the debate on how the Senedd creates its annual budget and how, in that context, Ministers are empowered by the Senedd to operate in the area of taxation. With the proposed review coming four years after the implementation of the legislation, I would very much hope that all of that broader discussion would have matured a great a deal by then and that the review would be very timely and be an opportunity to air these issues in a very different context to the one we currently face.

My second amendment, amendment 4, calls on Welsh Ministers to consult the Senedd, and any such person that they consider appropriate as part of that process. It's important in my view that a broad range of voices and views are heard as part of the review, particularly that we, as parliamentarians who've created the Act, if it comes into force, have the opportunity to have an input into the review. So, I would encourage my fellow Members of the Senedd to support amendments 3 and 4 in particular.

Amendment 8, tabled by Peter Fox, essentially adds a new review point, two years after the Act comes into force. That's in addition to maintaining the existing commitment to review the Act after four years. As we've heard, amendment 9 is consequential to the approval of amendment 8. I've given the timing for the review considerable thought, giving special consideration to how the Bill has changed as a result of the committee's report and the amendments made at Stage 2. The timing of the review of this legislation has to ensure that enough time has passed to make the review meaningful, but also that the outcome of the review will be able to inform the development of future arrangements early in the next Senedd term. This is also informed by the inclusion, of course, of the sunset provision five years after the Bill comes into force, so it's not the case that the Bill could be extended time and time again. It's very clear that the Bill will have an end date.

The review will consider the use of the power to make changes to the Welsh tax Acts and I consider that to have a review two years after it has come into force is too soon, as there's every chance that the power will not have been used at that point, rendering the review, to a large extent, meaningless. And furthermore, it does take time and resources for such reviews to be conducted if they're to be undertaken in a meaningful way. If the review was set at two years after Royal Assent, we would likely need to start work on that review not long after the Bill came into force. It also seems somewhat ineffective and repetitious to have those two reviews so close together in time when it's unlikely that there would have been much change during that time. So, for that reason, I am not able to support these amendments. 

Amendment 3, tabled by Llyr Gruffydd and supported by Peter Fox, requires that the review of the operation and effect of the Act must include consideration of alternate legislative mechanisms for making changes to the Welsh tax Acts and regulations made under those Acts. I've set out my intention to work with the committees to establish longer term arrangements for making changes to the Welsh tax Acts, which would necessarily include consideration of alternative legislative mechanisms for making changes to the Welsh tax Acts. I've also committed to specifically review the operation and effect of this Act four years after it comes into effect and that requirement is now on the face of the Bill. So, I don't consider this amendment is strictly necessary as this work will be taken forward as part of the wider considerations of those alternative legislative mechanisms. This might, but will not necessarily, include consideration of an annual or less frequent finance or taxation Bill process. I have reservations that placing a statutory requirement on the Welsh Ministers to report by a fixed date might lead to undue pressure on any working groups established to fit within that timescale, but whilst I do have those reservations, I am content to ask Members to support amendment 3, as whilst work on these long-term arrangements will be undertaken anyway, I am willing to go one step further and demonstrate my commitment by setting this out on the face of the legislation.

Amendment 4, also tabled by Llyr Gruffydd and supported by Peter Fox, requires the Welsh Ministers to consult the Senedd and other appropriate persons as part of the review of the legislation, and I am of course happy to attend any meeting of the Finance Committee, or any other committee for that matter, when they invite me, in order to discuss the detail of the work being undertaken and the emerging thinking as to what the longer term mechanisms should be. It seems to me that such a process of engagement and consultation will happen as a matter of course. In addition, the Welsh Ministers would, as a matter of course, consult appropriate persons as necessary in the development of this review, and that is how I've approached the policy development undertaken on this Bill, and the Welsh tax Acts more broadly to date, and I will ensure that, together, the longer term mechanism is right for Wales. So, in summary, in terms of this amendment, whilst I believe that it's not strictly necessary as I would in any case be writing to the Senedd to ask for their views on the review of the operation of the Act and engaging with appropriate people in the development of the review, I am of course willing to demonstrate my commitment to working together on developing this legislation by accepting amendment 4 and setting this out on the face of the legislation.

And then just to respond to some of the broader concerns that were raised during this particular section of the debate this afternoon. In the ordinary circumstances of law making—that is, where law is made as a result of considered policy development rather than required urgently or in response to external events—it is of course right that the Senedd should determine who is taxed and how they're taxed in accordance with the constitutional principles set out in the Government of Wales Act 2006. However, the power within the Bill is intended to deal with extraordinary circumstances that are distinctive to tax legislation. To provide an example, there have been many instances where new tax elements of stamp duty land tax have been introduced by the UK Government immediately or very shortly after an announcement is made, and this is generally to prevent taxpayers from forestalling—that is, bringing forward a transaction or alternatively delaying their transaction to benefit from a pre-announced tax change. The UK Government has recognised the distinctive nature of tax legislation when it provided UK Ministers with a power in section 109 of the Finance Act 2003 to be able to make any changes to stamp duty land tax legislation that are expedient in the public interest.

The Scottish Parliament provided the Scottish Government with many regulation-making powers in its devolved tax Acts, including the setting of rates and bands by made affirmative procedure regulations. And, of course, this Senedd followed the precedent set by the Scottish Parliament, and provided Welsh Ministers with a similar suite of regulation-making powers, including the setting of rates by made affirmative procedure regulations. So, this Bill is seeking to build on these precedents, developing a flexible and agile mechanism for responding to external circumstances that provide a short-term solution for this stage in our devolution journey. Colleagues will be aware that I've really sought to restrict the scope of the regulation-making power in this Bill as much as possible. It may only be used where Welsh Ministers consider it necessary or appropriate, and in line with those four purpose tests. And, very importantly, during scrutiny and in discussions with Members, the power has been further curtailed, both in what it can be used to do and the period for which it can be used.

I'm very supportive of the need to look at the long-term arrangements to make changes to Welsh tax Acts, and indeed I've committed to commencing that work with committees later in the autumn. I'm also starting to consider the scope and who needs to be involved in that work. But it's not possible, nor would it be right, for us to bring in these arrangements overnight without undertaking what is going to be really thorough policy development and engagement too, so that we have the most appropriate future legislative mechanism that meets our specific needs here in Wales.

Peter Fox to reply to the debate. 

Thank you, Llywydd. Can I firstly thank Llyr Gruffydd for his support throughout and for my amendments there? Minister, I'm pleased that you said that you will be supporting amendments 3 and 4 in the name of Llyr Gruffydd. I'm disappointed that you can't accept 8, as I think it's only fair to say that there was a huge amount of concern from everyone we took evidence from that using secondary legislation to alter primary legislation was almost an attack on this legislature, because we are the Senedd; we should be making the decisions, and we should be enabled to scrutinise things very thoroughly. I know that Mike Hedges isn't here today, but I know that if he had been here, he would have shared his concern also that he felt that there should be an opportunity to review at two years, even if it's only to tell us that nothing has happened, or some indication of when it might be used. That additional opportunity would help satisfy the lack of scrutiny that we feel that we have. So, Llywydd, I'm disappointed that it doesn't look like the Government can accept amendment 8, but I'm happy that it looks like 3 and 4 will be supported.

The question is that amendment 8 be agreed to. Does any Member objects? [Objection.] Yes, there is objection. Therefore, we will proceed to a vote on amendment 8 in the name of Peter Fox. Open the vote. Close the vote. In favour 24, no abstentions, 25 against. Therefore, amendment 8 is not agreed.

Amendment 8: For: 24, Against: 25, Abstain: 0

Amendment has been rejected

Amendment 3, is it being moved by Llyr Gruffydd?

Amendment 3 (Llyr Gruffydd, supported by Peter Fox) moved.

Moved.

Yes, it's been moved. Are there any objections to amendment 3? No, therefore amendment 3 is agreed.

Amendment agreed in accordance with Standing Order 12.36.

Amendment 4, Llyr Gruffydd.

Amendment 4 (Llyr Gruffydd, supported by Peter Fox) moved.

Moved.

The question is that amendment 4 be agreed to. Does any Member object? No, no objection, therefore amendment 4 is agreed.

Amendment agreed in accordance with Standing Order 12.36.