, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
I think that the reason why we're not able to provide costs is because we don't know precisely to what external events we will be responding and what the necessary response might be. As I say, some of those costs could just be absorbed within the normal…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
We work really closely with the WRA to consider the implications of any changes in devolved tax policy and their expertise and advice on tax design does help us to ensure that proposals are appropriate. So, we've worked—. We have quite live recent examples of…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
Yes. The regulation-making power would be extended for any future devolved Welsh taxes. The use of the power would be constrained in the same way, for any new Welsh taxes, to the four purpose tests. Shall I check with officials if they have any reflections on…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
Yes, I agree in principle to the review of the legislation. I think it would make sense for the legislation to be reviewed after the powers have been used a number of times, or in a number of different scenarios. So, there would be some consideration given…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
For both the draft and made affirmative regulations, the key rationale is to ensure that those regulations must be voted on before the legal effect is made permanent. I think that that is a very, very important part of this Bill. Welsh Ministers will propose…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
Yes, and I absolutely agree with you that the Senedd's role in scrutiny of legislation is essential. Whenever I'm involved in Bills, I'm always very conscious that we're not just making legislation for the current Government; we're making legislation for…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
Sorry. I was on mute, sorry. [Laughter.] The Welsh Government has made retrospective legislation on a number of occasions previously, for example, in relation to teachers' pay and conditions in 2021, however, we haven't in relation to tax, so this would be…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
The Bill provisions have been subject to very detailed legal advice by lawyers within our Welsh Government legal services and the advice provided to me, as a result of that analysis, confirms that the Bill will not in itself engage convention rights. However…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
I think within the four, we've captured everything that we think might be likely, but shall I—? Perhaps the officials want to reflect on any of the consultation responses or any of the engagement activity that we've been doing around the four purpose tests.
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
So, for both devolved taxes, there is always the risk that there will be individual or mass-marketed avoidance activity that Welsh Government and the Welsh Revenue Authority might want to stop with immediate effect. That could be because there is a lacuna or…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
Great. Thank you. So, the regulation-making power can only be used to respond to those external events where we, as Welsh Ministers, consider it necessary or appropriate and in response to those four specific purposes. And yes, as I've mentioned, this is an…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
And if we are able to have further devolution of tax powers, then these tools will help us respond to these changes under those four purposes in future with new legislation as well.
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
Yes, by all means. I don't think we would disagree, Mike, with what you're saying about the tax, but I'll let Andrew elaborate a bit more.
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
So, Mike's right, I wasn't involved at the start of the this journey. But I might ask officials if they have any reflections, with their collective institutional memory of this piece of work. I don't know if perhaps Andrew or Anna might be able to help.
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
It's clear that seeking new regulation-making powers should be only done through robust consideration and scrutiny, and I think that we've had experience now with these existing pieces of legislation, which have helped us consider what additional tools might…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
So, the regulation-making powers included in the Welsh tax Acts were those that were considered appropriate at the time the respective Bills were introduced, and there's always a balance to be struck between the attractiveness of the regulation-making powers…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
Yes, so the Bill does limit ministerial discretion in several important ways. Firstly, we have to be satisfied that any changes that Ministers want to make fall within one of those four purpose tests as set out in clause 1. That's really important, it's…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
So, the Bill seeks to provide Welsh Ministers with the necessary tools to be responding to external events in the most appropriate manner at the most appropriate time. As I mentioned, the Bill does seek to limit the use of the power to the four specific…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
Yes. The policy consultation proposed, originally, an extremely broad power that was intended to be used where Welsh Ministers considered it expedient in the public interest, and that mirrors the wording set out in section 109(1) of the Finance Act 2003…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
Yes, I know there is ongoing interest in this, but I think that my position does still remain: I don't consider the timing is right to introduce an annual primary legislative route, such as a budget or finance Bill, through which changes to Welsh tax Acts can…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
Well, my understanding is that it is relatively rare for legislation to include such a process as proposed by the Bill, but of course that shouldn't be a reason for not adopting an innovative and agile process that's right for Wales. Such a regulation-making…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
Yes, I do think it's appropriate, and that's because the scope of the power within the Bill has been deliberately constrained by the inclusion of the four purpose tests, and that sets out absolute clarity, I think, in terms of the circumstances in which the…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
If we didn't have the necessary tools, we would have to look to other tools to respond to the external events. For example, an emergency Bill might be one way in which we could do that. But, I think the emergency Bills, obviously, they've only been used…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
The powers would be only utilised when necessary to respond to external events that can't be foreseen. And that's one of the challenges, really, because as the last couple of years have shown, none of us can predict what might happen. So, actually, it's not…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 1
Yes, of course. So, 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…
