Diolch. Our programme for government and co-operation agreement with Plaid Cymru commit to making reforms to council tax to make it fairer and more progressive. In December, I announced that I would be consulting this year on an ambitious package of reforms as the starting point on a journey towards meeting those aims. Our published work last year concluded that to meet those aims in the shorter term, we would need to consider a revaluation to allow us to change the bands and tax rates. It also highlighted the need for us to improve our national support scheme and examine the framework for discounts and exemptions. In parallel to this work, we will continue to work on alternative ways to raise local taxes that may share the burden more fairly in future, such as a local land value tax.

I am taking a phased approach to designing a new system because I am keen that everyone has the opportunity to contribute to this work. The consultation I have launched today sets out a road map. It represents phase 1 of a multistage conversation, seeking views in an open and collaborative way. I will take into account everything we learn from this phase, and I hope to be in a position to launch a consultation on detailed proposals in phase 2 next year. The consultation I am launching today aims for a fair and progressive system that rebalances the tax burden on households, funds services that benefit everyone, is a tax that connects people with communities, and has regular updates built in it to keep it fair in future.

I have worked closely with the Plaid Cymru designated Member, Cefin Campbell MS, on this shared priority. I have continued to meet local government leaders to gather views from across Wales. I have established governance arrangements, through which we are engaging with partners who are key to delivering what we set out to achieve. These include practitioners in local authorities, the Valuation Office Agency and the Valuation Tribunal for Wales. We have continued working with respected expert institutions in this field, including the Institute for Fiscal Studies.

There are a great deal of positives about the council tax system that we shouldn't lose sight of. It has stood the test of time since the 1990s and it represents local democracy in action. Overall, it is a very efficient and stable tax, raising £2 billion every year for essential services like schools and social care—services that we can't do without. It also has low administrative costs, is well understood by taxpayers, and its underlying basis, property value, is a good broad indicator of people's wealth relative to one another. However, I do recognise that it is not perfect. The system we currently have places a higher tax burden proportionately on people with lower levels of wealth. As Members will know, all properties in Wales liable for council tax are placed in one of nine bands, based on property values from April 2003. This means the tax is nearly 20 years out of date, and what we pay no longer reflects our circumstances. The amount of council tax charged for band I properties is three and a half times as much as band A, yet homes in the top band could be worth more than nine times as much as those in the bottom band. It is this Government’s view that a revaluation should take place, and we should aim to implement a new structure for council tax based on up-to-date values. If we were to do this, the consultation seeks views on doing so from April 2025.

While house prices in Wales have grown significantly since 2003, I want to be clear this does not mean that everyone's council tax will increase. The system we design will remain a relative one. Previous research suggests up to 75 per cent of households would either be unaffected or would see their bills reduce. I also want to be clear that the purpose of revaluation is not to increase the total amount raised from taxpayers, but to redistribute the burden to ensure the fairness and integrity of the system. This exercise would open up an opportunity to add bands to the top or bottom ends of the scale, which might help create tax rates that are more progressive. There will be further points when we can consider how best to redesign the system. From 2025 onwards, and for the first time in the history of council tax, we want to deliver rolling revaluations to avoid the distortions in bills that we know can occur when updates are postponed over many years. We want to introduce a cycle of revaluations to not only provide clarity for taxpayers and delivery bodies, but to ensure the council tax burden is redistributed fairly on a regular basis. 

Moving on to our system of council tax support for low-income households, from today I am seeking views on improving our national council tax reduction scheme. I am proud that we have continued to maintain entitlements to reductions for around 270,000 vulnerable and low-income households. As the cost-of-living crisis worsens, support of this kind is even more vital to thousands of struggling households. But take-up of the scheme could be improved. The regulations are complex, and we are prevented from making in-year changes where needed. As the roll-out of universal credit scales up, it introduces further complexity into the way that people apply for support and the way their entitlement is calculated. I am keen to generate views from practitioners and others about how we can simplify or modernise the scheme to make it as easy as possible to access.

Another key element of the consultation focuses on council tax discounts and exemptions. Many of the current arrangements have been in existence since 1993. Some help to recognise household circumstances and people's ability to pay, and some make practical sense from a tax-collection perspective. I want to ensure our decisions are fair and fit for a modern system. It needs to be easy for practitioners to administer and clear for people to understand. I look forward to hearing ideas about this through our consultation. The consultation I have launched today seeks views on a path to ambitious change. This is why these reforms need to be part of a national, civic conversation with the people of Wales. I'd like to reassure Members and the public today that if we undertake the reforms that we are seeking views on, we would consider targeted transitional arrangements for those who may need time to adapt to any changes.

Finally, I want to be very clear: individuals will see no immediate changes to their bills as a result of the consultation I am publishing today. We have a great deal of work to do before reforms can be introduced. These reforms will be significant undertakings that will need legislative time and the support of Members from across this Senedd. I welcome all comments on phase 1 of our consultation, and I will keep Members informed of developments.