Senedd Committees critical of the Welsh Government’s approach to new tax legislation

Two Senedd committees have criticised the Welsh Government’s approach to new tax legislation that it is pushing through the Welsh Parliament.

The Finance Committee and the Legislation, Justice and Constitution Committee have both published reports analysing the Welsh Tax Acts etc. (Power to Modify) Bill and questioned whether the power proposed in the Bill is appropriate.

The Bill in its current form would give Welsh Government Ministers power to amend Welsh Tax Acts quickly using regulations rather than needing to pass ‘primary legislation’ and give Members of the Senedd opportunities to amend and debate each proposal.

The Bill would also allow Ministers to change the law with immediate effect, before seeking Senedd approval.

Giving evidence to the Finance Committee, the former clerk of the Assembly between 2001 and 2007, Sir Paul Silk, expressed a general concern with “the growth in the use of secondary legislation”, suggesting that “legislatures should remain sceptical and vigilant when Governments propose any enhancement of their own powers to make legislation without full scrutiny by the legislature”.

Safeguards

Peredur Owen Griffiths, Chair of the Finance Committee, said: “As it stands, the majority of the Committee is content for the Bill to proceed to the next stage, but we urge the Welsh Government to take on board the recommendations in our report which will provide important safeguards to the use of this new power.

“Tax devolution is a relatively recent development in Wales and, as the Welsh tax system matures, it is important for the Senedd to be satisfied that developments are proportionate and in line with democratic principles.

“We have reservations with the Bill’s approach and believe that the Senedd must be given the best possible chance to scrutinise and influence new tax laws as opposed to letting the Welsh Government change tax laws as and when it sees fit.”

Huw Irranca-Davies, Chair of the Legislation, Justice and Constitution Committee, said: “Our report concludes that the Bill does not represent an appropriate legislative vehicle to make changes to the Welsh Tax Acts and it should be regarded as a short-term, temporary measure only.

“The justification provided by the Minister for the approach proposed is inadequate and the Committee is agreed that the Bill provides far too much power for the Welsh Ministers at the expense of the role of the Senedd.

“If the Welsh Government is determined to move ahead with this Bill, the Committee is clear that they should respond positively to our recommendations, in particular, to include a ‘sunset provision’. This will provide the Welsh Government with time to develop more appropriate approaches involving the use of primary, rather than secondary, legislation.”