National Assembly for Wales

Welcome, everyone, to this meeting of the Local Government and Housing Committee. Our first item today is introductions, apologies, substitutions and declarations of interest. We've receive apologies from Lee Waters MS and Altaf Hussain MS, and we have Carolyn Thomas and Peter Fox substituting today—welcome, both. As previously noted, Sarah Murphy has recused herself from all committee business following her ministerial appointment, and Joyce Watson will be attending as a substitute—welcome again, Joyce.

As a result of membership changes agreed yesterday, Siân Gwenllian has replaced Luke Fletcher as a member of the committee, but as Luke has tabled amendments being considered today, he is in attendance as a substitute for Siân. I'd just like to thank you, obviously, Luke, for your contributions to the committee's work.

As previously agreed, this meeting is being held in person and there is no facility for participants to join virtually. Public items are being broadcast live on Senedd.tv and the Record of Proceedings will be published as usual. The meeting is bilingual, and simultaneous translation is available. Are there any declarations of interest from committee members? There are not.

We will move on to item 2, Stage 2 proceedings with regard to the Local Government Finance (Wales) Bill. I'm very pleased to welcome the Cabinet Secretary for Finance, Constitution and Cabinet Office—welcome, Cabinet Secretary, and welcome to your officials as well. Obviously, the Cabinet Secretary is the Member in charge of this Bill.

You should have, committee members, the marshalled list of amendments and the groupings list before you. The marshalled list is the list of amendments in the order agreed by committee at its meeting on 22 May, and it's the order in which we will consider amendments, as outlined on the agenda. You will see from the groupings list that amendments have been grouped to facilitate debate, but the order in which those amendments will be called and moved for a decision, as I say, is dictated by the marshalled list.

I will advise Members when I call them whether they are being called to speak in the debate or to move their amendments for a decision. Members who have added their names in support of an amendment will be invited to speak. Should a Member wish not to move an amendment, they should indicate this at the appropriate point of proceedings. In those circumstances, another member of the committee could choose to move the particular amendment. There will be one debate on each group of amendments. Members who wish to speak in a particular group should indicate in the usual way, and I will call the Cabinet Secretary to speak on each group.

For the record, in accordance with the convention agreed by the Business Committee, as Chair I will move amendments in the name of the Cabinet Secretary. For expediency, I will assume that the Cabinet Secretary wishes me to move all of her amendments, and I will do so at the appropriate place in the marshalled list. Cabinet Secretary, if you do not want a particular amendment to be moved, please indicate at the relevant point in the proceedings. 

In line with our usual practice, legal advisers to the committee and the Cabinet Secretary are not expected to provide advice on the record. If committee members wish to seek legal advice during proceedings, please do so by sending a direct message to the legal adviser or the clerk. If necessary, I will call an adjournment or the legal adviser will reply to you directly.

We haven't scheduled any breaks in the committee proceedings today, but we will have breaks at appropriate points.

So, Stage 2 scrutiny of the Local Government Finance (Wales) Bill. The first group of amendments relate to the antecedent valuation date. Actually, it's one amendment, amendment 9. This is the lead and only amendment in this group, and I call on Peter Fox to move and speak to that amendment.

Thank you, Chair, and thank you for the opportunity to contribute to the debate on this important Bill. As you pointed out, there's just one amendment, amendment 9, here, and this is a probing amendment. It's to request clarification on any Government policy, or likely future policy, on the approach to the Government setting of the antecedent valuation date, as witnesses have called for shortening of the time period from two years to one, in addition to ensuring that the Senedd is kept informed of any exercising of these powers under paragraph 2(3)(b) of Schedule 6 to the Local Government Finance Act 1988 in relation to Wales. So, we just, really, want some clarification if there's an opportunity for that to be moved from one to two years.

Okay. If there are no other Members wishing to speak, I call on the Cabinet Secretary to speak.

Thank you. I'd just like to begin, Chair, by thanking the committee for all of its work so far in terms of scrutiny of the Bill. It's been incredibly helpful, and I'm just really grateful to all Members of the committee here, and those who have also not joined us today as well, and also 'thank you' to the clerking team too. And then, just also to put on record my thanks to Cefin Campbell as well, because the work on council tax reform has been an important part of the co-operation agreement, and I'm very grateful for that work that he did. Some of that informs the Bill—it's not all of the work, but certainly the Bill is an important part of that.

So, just moving on to amendment 9. As Peter Fox says, it would require Welsh Ministers to publish a policy statement in relation to the antecedent valuation date for non-domestic rates revaluations. This amendment is not necessary as we've already set out our position on this matter, including in our 2022 consultation on NDR reform. The established practice is to set the AVD date at two years prior to the date on which a revaluation is to take effect.

We are working with the Valuation Office Agency to explore the potential for the gap between the AVD and the date of revaluation to be reduced in future. That would be a fundamental change to the system and one to be considered in the longer term. We do need to ensure that the more frequent revaluations, and the measures that are required to achieve this, are embedded first, to inform further detailed consideration of shortening the AVD in future.

I was very pleased to accept the committee's Stage 1 recommendation to keep the Senedd updated on any proposed changes, and I would absolutely be keen to do that. So, just in conclusion, I would ask Members, for those reasons, to resist amendment 9.

Okay. Diolch yn fawr, Cabinet Secretary. Peter Fox to respond.

As I say, it was probing amendment, and you've given further clarity, Cabinet Secretary. This isn't an amendment I will be taking to the vote.

Okay. So, does any Member object to the withdrawal of amendment 9? No, then the amendment is withdrawn.

Group 2 relates to non-domestic rating reliefs. The lead amendment in this group is amendment 10, and, again, I call on Peter Fox to move and speak to the lead amendment and, indeed, other amendments in this group. Peter.

Thank you, Chair. I will speak to my amendments 10, 11, 12, 13, 14, 15, 24, 38, 39 and 41. While our first amendment removes the whole of section 5 of the Bill, which will remove the ability for Welsh Ministers to confer, vary and withdraw reliefs from non-domestic rate liabilities for hereditaments in Wales, our other amendments in this group ensure that the Welsh Ministers undertake a consultation with appropriate persons before making regulations under the powers proposed in section 5 of the Bill, as this helps to ensure that there is transparency when Welsh Ministers make decisions relating to varying and withdrawing reliefs, which is even more important, as any policy changes made with these provisions will have significant implications on ratepayers, which naturally means that they should be able to have a say. Amendments 14 and 15 ensure that the Welsh Ministers publish guidance on how billing authorities in Wales should decide applications for charitable rate relief in respect of unoccupied hereditaments in Wales, as some smaller charitable organisations are run solely by volunteers who may need additional support and guidance. Finally, amendment 24 places a minimum period of 60 days, excluding periods of dissolution or recess of more than four days, to enable Senedd committees to scrutinise any draft regulations proposed.

I hope that Peter, in his closing remarks, can give a bit of clarification on amendment 10 and why the amendment is seeking to remove section 5. That's the only thing I'd like to raise.

Do any other Members wish to speak on this group? No. Cabinet Secretary.

I'll speak first to the Government’s amendments, amendments 1 and 5, which make minor technical changes. Amendment 1 would ensure that the affirmative procedure continues to apply to an existing regulation-making power, and amendment 5 would omit a previous amendment to the 1988 Act, which is spent as a consequence of section 8 of the Bill.

Turning to the remaining amendments in this group, tabled by Peter Fox, amendment 10 would remove the powers for the Welsh Ministers to confer, vary and withdraw reliefs by regulations. I set out the rationale for these powers during Stage 1, and we already have a range of individual powers to provide for reliefs by regulations. The powers in section 5 are no more significant in their potential effect on non-domestic rates liability than other legislative and discretionary mechanisms that already exist, but provide for consistency across the landscape of reliefs. Removing section 5 could disadvantage ratepayers by delaying or even preventing the provision of new support where there is a need to act very quickly.

Amendments 11 to 13 would require a consultation before the exercising of the powers by the Welsh Ministers to confer and withdraw NDR reliefs by regulations. When considering whether to consult with stakeholders, we take into account the Welsh Government’s policy on consultation, and we act in accordance with common law consultation duties. Statutory consultation in all circumstances could disadvantage ratepayers in Wales by delaying, or even preventing, the provision of new support. In my response to the related Stage 1 committee recommendation, I set out examples of recent circumstances where we could not have acted to provide support to ratepayers, in the required timescales, if such a requirement had applied to our existing powers. It would also be disproportionate where only minor administrative amendments are being made to regulations.

Amendments 14 and 15 would require the Welsh Ministers to publish guidance for local authorities on the strengthened eligibility criteria for charitable rate relief for unoccupied properties. The required focus of that guidance would be the new tests that a local authority must be satisfied of, the reasons why a property is unoccupied, and its intended future use. I've accepted the committee’s Stage 1 recommendation to work with local authorities on guidance to be published before section 6 of the Bill comes into force, so a statutory requirement is not necessary. We have existing guidance on the full range of non-domestic rates reliefs, including in respect of charities and unoccupied properties, which is routinely updated to support local authorities and ratepayers.

Amendments 38, 39 and 41 are consequential on amendment 15. Amendment 24 would subject regulations made under powers provided by section 5 of the Bill to a superaffirmative procedure, in the form of a minimum laying period of 60 days. A superaffirmative procedure is only used in exceptional circumstances where the affirmative procedure is not considered to be sufficient. As I set out during Stage 1, I don't believe that is the case in relation to the provisions in this Bill. This amendment could disadvantage ratepayers in Wales by delaying or even preventing the provision of new support. This would be a particular problem where the budget available to inform the Welsh Government's approach is affected by the UK Government's autumn statement. None of the range of existing powers for Welsh Ministers to provide for NDR reliefs by regulations are subject to the superaffirmative procedure. In my response to the committee's Stage 1 report, I set out examples of circumstances where we wouldn't have been able to provide support to ratepayers in the required timescales if such a procedure had applied.

In conclusion, I would ask Members to resist amendments 10, 11, 12, 13, 14, 15, 24, 38, 39 and 41, and support amendments 1 and 5.

Diolch yn fawr. Do any other committee members wish to speak? Peter Fox to reply to the debate.

Thank you, Chair, and thank you, Cabinet Secretary. There is significant need for transparency and accountability, especially where ratepayers are likely to be impacted, and it's for that reason that we'll continue to push for more transparency with any charges or withdrawals of rate relief. That's all I needed to say, Chair.

If amendment 10 is agreed, amendments 11, 12 and 13 will fall. The question is that amendment 10 be agreed. Does any Member object? [Objection.] There is an objection, so we will proceed to a vote. The question is that amendment 10 be agreed. Will those in favour please raise your hands? Those against. I don't think that leaves room for any abstentions. There voted two in favour, four against, and amendment 10 is not agreed.

Peter—amendment 11.

Yes, move. 

That's moved. The question is that amendment 11 be agreed to. Does any Member object? [Objection.] We will proceed to a vote. Will those in favour please raise your hands? And those against. There voted three in favour, three against, so, as Chair, I use my casting vote against, and amendment 11 is not agreed.

Peter—amendment 12.

Move.

The question is that amendment 12 be agreed. Does any Member object? [Objection.] We will move to a vote on amendment 12. Will those in favour please raise your hands? And those against. There again voted three in favour and three against. I use my casting vote as Chair against, and amendment 12 is not agreed.

Peter—amendment 13.

Move.

Amendment 13 is moved. Does any Member object? [Objection.] We will move to a vote. Will all those in favour of amendment 13 please show? And those against. There voted three in favour, three against. I use my casting vote as Chair against. Amendment 13 is not agreed.

Peter—amendment 14.

Yes, move.

Amendment 14 is moved. Does any Member object? [Objection.] We will move to a vote. Will all those in favour of amendment 14 please show? And those against. There voted three in favour, three against. I use my casting vote as Chair against, and amendment 14 is not agreed.

Peter—amendment 15.

Yes, move, Chair.

Amendment 15 is moved. Does any Member object? [Objection.] We will again move to a vote. Will all those in favour of amendment 15 please show? And those against. Again, there voted three in favour, three against. I use my casting vote as Chair against, and amendment 15 is not agreed.

That takes us to group 3, powers to confer or withdraw exemptions. The lead amendment in this group is amendment 16, and again I call on Peter Fox to move and speak to the lead amendment and other amendments in the group.

Thank you, Chair. I'll speak to my amendments 16, 17 and 21. Amendment 16 calls for section 9 of the Bill to be removed from the Bill, as section 9 is where broad powers to make subordinate legislation are being taken with no firm evidence or policy aim in mind. This is something that the Legislation, Justice and Constitution Committee also found to not be appropriate or acceptable. Perhaps the Cabinet Secretary can provide a little more clarification there. Amendments 17 and 21 go towards increasing the level of accountability, consultation and transparency when it comes to withdrawing or conferring exemptions, which also have a significant impact on ratepayers. Thank you.

Thank you, Peter. Luke Fletcher.

Diolch, Gadeirydd. No additional comments, other than to say that we are happy to co-submit amendment 21, where the amendment looks to provide a minimum period of 60 days for allowing committees to scrutinise regulations proposed under the powers in section 5. I think this is a perfectly sensible thing. Where these powers come into play, it's only right that the Senedd is given an appropriate amount of time to scrutinise them.

Thank you, Luke. Do any other Members wish to speak? No. Cabinet Secretary.

Thank you. Amendment 16 would remove the power for the Welsh Ministers to confer, vary or withdraw NDR exemptions by regulations, and I set out the rationale for this power during Stage 1. There are a variety of ways in which a ratepayer’s liability might be reduced to zero. These include the use of legislation or existing discretionary powers of local authorities to provide full relief. Exemptions are an alternative to the provision of full relief, applied when it is considered that the NDR liability for a certain type of property should be reduced to zero on a permanent basis. In such circumstances, there would be a cost and no benefit associated with valuing properties of that type. This power is, therefore, no more significant in its potential effect on liability than other legislative or discretionary mechanisms that already exist, but provides greater consistency across these different elements of the system. Removing this section could disadvantage ratepayers by delaying the provision of a new exemption.

Amendment 17 would require consultation before the exercising of the power for the Welsh Ministers to confer and withdraw NDR exemptions by regulations. As I have set out, the development of any regulations will take place in accordance with existing common law legal duties to consult and the Welsh Government's established policy on consultation with stakeholders. So, a statutory requirement in that regard isn't necessary and may be disproportionate in some instances, such as where minor administrative amendments may be made to regulations. The existing, but more limited, power for the Welsh Ministers to provide for new exemptions by regulations isn't subject to a statutory consultation duty.

Amendment 21 would subject regulations made under the power provided by section 9 of the Bill to a superaffirmative procedure, in the form of a minimum laying period of 60 days. A superaffirmative procedure is used only in exceptional instances, where the affirmative procedure is not considered to be sufficient. As I set out during Stage 1, I don’t believe that to be the case in relation to the provisions in this Bill. The existing, but more limited, power for the Welsh Ministers to provide for new NDR exemptions by regulations isn't subject to a superaffirmative procedure, and, importantly, these regulations could disadvantage ratepayers in Wales by delaying the provision of a new exemption. It's for those reasons that I ask Members to resist amendments 16, 17, and 21.

Diolch yn fawr. Peter Fox to reply to the debate.

Thank you, Chair. I'd like to reiterate that it is a longstanding parliamentary principle that significantly changes to local taxation should be made by primary legislation, as transparency and accountability is highly important when it comes to making local tax changes. It is in this spirt that we tabled these amendments, Chair.

Thank you, Peter. If amendment 16 is agreed to, amendment 17 will fall. The question is that amendment 16 be agreed. Does any Member object? [Objection.] There is an objection. We will move to a vote. The question is that amendment 16 be agreed. Will all those in favour please raise your hands? And those against. There voted two in favour and four against, so amendment 16 is not agreed.

Peter, amendment 17.

Yes, move.

Amendment 17 is moved. Does any Member object? [Objection.] There is an objection. We will move to a vote. All those in favour of amendment 17, please raise your hands. And those against. Okay, there voted three in favour, three against. I use my casting vote as Chair against, and amendment 17 is not agreed. 

Group 4, then—non-domestic rating multipliers. The lead amendment is amendment 18, and I call on Peter Fox to move and speak to the lead amendment and other amendments in this group. 

Thank you, Chair. Amendments 18 and 19 call on Welsh Ministers to undertake consultation with people they deem appropriate before making regulations that introduce differential multipliers for the calculation of NDR liability for hereditaments in Wales. They also call on Welsh Ministers to make regulations under the new proposed differential multiplier powers in paragraph A16, with the effect for hereditaments of certain rateable values to be determined by Welsh Ministers in regulations. Where the applicable multiplier is less than the standard multiplier, it is important that the differences between small businesses and medium and large businesses are recognised in the rates that they pay. 

Amendment 22 will put in place a minimum period of 60 days, including periods of dissolution or recess of more than four days, to enable the Senedd and Senedd committees to scrutinise draft regulations that propose to introduce differential multipliers for the calculation of non-domestic rate liability in Wales.

Thank you, Peter. Luke Fletcher. 

Diolch, Cadeirydd. I'll speak to my amendment 44. This amendment would place an obligation on Welsh Ministers to publish a statement of policy on setting the non-domestic rating multiplier in Wales, and, then, to lay before this Senedd for debate. I appreciate the conversations that I've had with the Minister both in private and on the floor of the Senedd as well. This particular part of the Bill I find, actually, quite exciting—and I don't know what that says about me, Chair [Laughter.] But we have a real opportunity here to make a system that actually works better than the system that we have right now, where we all have constituents who come to us on a regular basis complaining about non-domestic rates. We all know, for example, sectors, like the hospitality sector and retail, that are struggling with business rates. This gives us an opportunity, actually, to set out from the get-go what our intentions would be with these powers.

And the reason why I'd be keen to have a policy statement for debate in the Chamber as part of this Bill is because I can think of a number of Bills where sections that confer powers onto the Welsh Government haven't yet been used—so, for example, the Wales Act 2017, section 48(1), that would have given the Senedd legislative competency over water within the geographic boundaries of Wales. That's still, as yet, to be enacted. So, this amendment is to ensure that there is some sort of action as a result of these powers being conferred, because I think this is a real opportunity and I would hate for it be missed or delayed in any way.

Okay. Thank you, Luke. Okay, if no other Members wish to speak, Cabinet Secretary. 

Turning first to the amendments tabled by Peter Fox, amendment 18 would require a consultation before exercising the power for Welsh Ministers to set differential NDR multipliers. And, as I set out, the development of any regulations will take place in accordance with existing common law legal duties to consult and the Welsh Government's established policy on consultation with stakeholders. A statutory requirement in this regard, then, is not necessary, and it might be disproportionate in some instances, such as where minor administrative amendments might be made to regulations. The existing power for Welsh Ministers to set the current single multiplier at any level by regulations isn't subject to a statutory consultation duty. I've provided a detailed explanation of the potential and unintended consequences of such a duty in response to the committee's related Stage 1 recommendation, and I've already committed to consulting before introducing any differential multiplier. However, an ongoing duty to consult in relation to the annual maintenance of differential multipliers could disadvantage ratepayers, and that's because any such annual maintenance could not be implemented until after the UK Government's autumn statement, which, in turn, informs the Welsh Government's approach to the annual setting of the existing multiplier. If consultation was required in relation to the annual maintenance of differential multipliers, there would simply be insufficient time to prepare regulations and bring them into force in time for local authorities to implement the specified multiplier prior to undertaking their annual billing activities.

Amendment 19 would, in effect, require the powers provided by section 10 to be used to set a small business multiplier. As I set out in response to the related Stage 1 recommendation from the Legislation, Justice and Constitution Committee, there is no current policy intention to create a small business multiplier for Wales. This is just one example of an approach that it would be possible to adopt using the powers in section 10 of the Bill. And, importantly, there has not been any consultation on introducing a small business multiplier, so amending the Bill in that way would actually be counter to the commitment to consult that I've just set out, and, indeed, the principle behind amendment 18. There are other ways in which the Welsh Government may wish to target the use of any differential multiplier in relation to our priorities and the needs of Wales, and I absolutely agree that it does provide us with exciting possibilities and exciting things to grapple with. But section 10 is really intended to enable us to undertake the analysis of a wide range of policy options when considering whether to introduce a differential multiplier for Wales, rather than to enable a specific change to be made.

Amendment 22 would subject regulations made under the power provided by section 10 of the Bill to a superaffirmative procedure, in the form of a minimum laying period of 60 days. A superaffirmative procedure, as I've said a number of times already now this morning, is only used in exceptional circumstances where the affirmative procedure is considered to be insufficient. As I set out during Stage 1, I don't believe that to be the case in relation to the provisions in this Bill, and, indeed, the amendment could disadvantage ratepayers by delaying or even preventing a beneficial change to the multiplier, and I think that's been the test behind our approach to many of these regulations in terms of exploring whether it could potentially be disadvantageous to ratepayers in Wales. The existing power for Welsh Ministers to set the multiplier is not subject to a superaffirmative procedure, and that would be a particular problem, as the budget available to inform the Welsh Government's approach is routinely affected by the UK Government's autumn statement.

In my response to the committee's Stage 1 report, I explained why we could not have acted to freeze or limit growth in the multiplier in recent years, if such a procedure had applied. There would not have been sufficient time to prepare regulations between the publication of our draft budget and the annual billing activities, and the same constraints would apply to the annual maintenance of any differential multiplier.

So, turning to the remaining amendment in the group, tabled by Luke Fletcher, amendment 44 would require Welsh Ministers to publish a statement of their policy with respect to the use of the powers to calculate NDR multipliers. This would apply not only to the power to prescribe differential multipliers introduced by section 10, but also to the existing power to set the multiplier. This amendment is not necessary, as the existing framework already allows for the intended clarity and opportunity for scrutiny. The long-established default calculation of the multiplier, as set out in primary legislation, maintains NDR revenue in real terms. Each time we use our powers to depart from that calculation, the responsible Cabinet Secretary will continue to set out their policy in the Senedd, as part of the debate that is required to seek the Senedd's approval of the associated regulations under the affirmative procedure.

I have committed to consulting before introducing any differential multiplier, which will naturally involve setting out the Welsh Government's policy. Once any differential multiplier is implemented, the established annual considerations and process will apply. So, in conclusion, I would ask Members to resist amendments 18, 19, 22 and 44.

Okay. Thank you, Cabinet Secretary. Peter Fox to reply.

A common theme I think we'll have throughout: what is an exceptional circumstance and what's not? I don't know what the actual formal categorisation of that is, and I would have thought tax increases or multiplier increases are quite exceptional circumstances when they happen and should be subject to a deeper set of scrutiny and consultation. So, I expect we'll continue to lobby for deeper consultation for the Senedd and so that Senedd committees can have that deeper insight into these changes. Thank you, Chair.

Okay. Thank you, Peter. The question, then, is: is amendment 18 agreed to or does any Member object? Peter, sorry, are you moving the amendment 18?

Yes, I move.

Does any Member object? [Objection.] There is an objection. We will, then, move to a vote with regard to amendment 18. Will all those in favour, please show. And those against. Okay, there voted three in favour, three against. And, once more, I'll use my casting vote as Chair against, and amendment 18 is not agreed.

Peter, amendment 19.

I move.

Okay, amendment 19 is moved. Does any Member object? [Objection.] Okay, there is an objection. We will move to a vote on amendment 19. Will all those in favour, please show. And those against. Okay, once more, there voted three in favour, three against. I use my casting vote as Chair against, and amendment 19 is not agreed.

Luke, amendment 44. 

I move.

Amendment 44 is moved. Does any Member object? [Objection.] There is an objection. We will move to a vote on amendment 44. Will all those in favour, please show. And those against. Okay, once more, there voted three in favour, three against. I use my casting for as Chair against, and amendment 44 is not agreed.

The fifth group of amendments relate to artificial avoidance arrangements. The lead amendment is amendment 20. I call on Peter Fox to move and speak to the lead amendment and other amendments in the group.

Thank you, Chair. I'll speak to my amendments 20 and 23. Amendment 20 calls for section 13 of the Bill to be removed from the Bill as there is not enough specific information to demonstrate the need for the power that section 13 provides. Section 13 of the Bill makes provision about counteracting advantages obtained from artificial non-domestic rating avoidance. Will the Cabinet Secretary, perhaps, provide more information on that?

Where amendment 23 provides for a minimum period of 60 days, excluding periods of dissolution, blah-de-blah, we know what the answer will be to that, Chair. [Laughter.] Thank you.

Okay. Thank you very much, Peter. Luke Fletcher.

Diolch, Cadeirydd. If I can speak to amendment 20 first, I'll be opposing amendment 20, which would remove the provision of this Bill to address non-domestic rates avoidance. Understanding completely what I've just said under amendment 44, that we do have a system that is a blunt policy tool and isn't working properly, I don't think that means that we should be abandoning safeguards against avoidance of paying it. It's estimated that that costs the Welsh economy about £10 million to £20 million a year, and I think, at a particular time where public finances are strained, it's right to have those mechanisms in place to try and crack down on avoidance. 

However, on amendment 23, if I can move on to that, we, as a party and me here, are happy to co-submit this amendment. I think it'll achieve the same purpose as amendment 21 with respect to scrutiny periods.

Okay. Thank you, Luke. If no other Member wishes to contribute on this particular group of amendments, I'll call on the Cabinet Secretary.

Thank you. I'll first speak to the Government's amendment, amendment 8. This amendment would ensure that regulations may provide for rights of appeal to the upper tribunal, where ratepayers are subject to liability notices to counteract artificial avoidance arrangements. The intention is to enable consistency across similar routes of appeal within the NDR system. 

Turning to the remaining amendments in this group, tabled by Peter Fox, amendment 20 would remove the framework being introduced to address artificial arrangements for the avoidance of NDR liability. I explained in detail the context and rationale for these provisions in response to the related Stage 1 recommendations of the Legislation, Justice and Constitution Committee. The power to make regulations in section 13 has been carefully designed to be as limited as possible, while still enabling the long-established and uncontroversial policy intention behind the provisions to be achieved.

Proposals to define avoidance arrangements to be counteracted by the provisions will have been subject to consultation prior to regulations being brought forward.

Section 13 delivers an established Welsh Government commitment to ensure that avoidance techniques, which continually evolve, can be dealt with in a timely manner, so that the revenue risk to the public purse is minimised.

Amendment 23 would subject regulations made under the power provided by section 13 of the Bill to a superaffirmative procedure in the form of a minimum laying period of 60 days. A superaffirmative procedure is—as we’ve talked about—only used in exceptional circumstances, where the affirmative procedure is not considered to be sufficient. As I set out in Stage 1, I don’t believe that to be the case in relation to the provisions in this Bill. Amendments 20 and 23 would, therefore, lead to a delay in addressing identified avoidance arrangements, resulting in the prolonged avoidance of liability.

So, in conclusion then, I would ask Members to resist amendments 20 and 23, and support amendment 8.

Diolch yn fawr, Cabinet Secretary. Peter.

Thank you, Chair. It is important that any proposal to introduce new legislation-making powers can be supported and justified. This is also in line with the Legislation, Justice and Constitution Committee's findings. They found that the general avoidance framework, if needed, could be supported by appropriate statutory guidance to address concerns regarding consistency of approach. It was for this reason that they didn't feel that the evidence justified the section being included in the Bill. Hence, I brought those amendments forward. Thank you, Chair.

Okay, Peter. The question, then, is that amendment 20 be agreed to. Does any Member object? [Objection.] Okay, there is an objection. We will move to a vote. Will all those in favour of amendment 20 please show? And those against. Okay, there voted 2 in favour and 4 against, so amendment 20 is not agreed.

I move amendment 1 in the name of the Cabinet Secretary. The question then is that amendment 1 be agreed to. Does any Member object? No. Then amendment 1 is agreed.

Peter, amendment 21.

Yes, move.

Amendment 21 is moved. Does any Member object? [Objection.] There is an objection, so we will move to a vote on amendment 21. Will all those in favour please show? And those against. Okay, there voted 3 in favour, 3 against, and I use my casting vote against, so amendment 21 is not agreed.

Peter, amendment 22.

Move.

Amendment 22 is moved. Does any Member object? [Objection.] There is an objection. We will move to a vote on amendment 22. Will those in favour please show? And those against. Okay, there voted 3 in favour, 3 against. I used my casting vote as Chair against, so amendment 22 is not agreed.

Peter, amendment 23.

Move.

Amendment 23 is moved. Does any Member object? [Objection.] There is an objection. We will move to a vote on amendment 23. Will all those in favour please show? And those against. Okay, there voted 3 in favour, 3 against. I use my casting vote as Chair against, so amendment 23 is not agreed.

Amendment 24, Peter.

Move.

Amendment 24 is moved. Does any Member object? [Objection.] There is an objection. We will move to a vote on amendment 24. Will all those in favour please show? And those against. There voted 3 in favour, 3 against. I use my casting vote as Chair against, so amendment 24 is not agreed.

I move amendment 5 in the name of the Cabinet Secretary. The question is that amendment 5 be agreed. Does any Member object? There is no objection, so amendment 5 is agreed.

Group 6 relates to information to be provided to the valuation officer. The lead amendment in this group is amendment 6. 

I move amendment 6 in the name of the Cabinet Secretary, and call on the Cabinet Secretary to speak to the lead amendment and other amendments in the group.

Thank you. I'll speak first to the Government amendments 4, 6 and 7. Amendments 4 and 6 would ensure that regulations may provide for rights of appeal to the upper tribunal, where ratepayers are subject to a penalty for failure to comply with requirements to provide information to the VOA, HMRC and local authorities. The intention is to enable consistency across similar duties on ratepayers within the NDR system, including those introduced by section 12 of the Bill. Amendment 7 would omit a previous amendment to the 1988 Act that is superseded by provisions in section 12 of the Bill.

So, turning to the remaining amendment in this group, tabled by Peter Fox, amendment 42 would apply the affirmative procedure to the commencement of the new duties for ratepayers to provide information to the VOA. As I set out in response to the related Stage 1 recommendation of the committee, the provisions are set out in full and are the subject of ongoing scrutiny during the passage of the Bill. I've provided clear assurances that the provisions will not be commenced until the Welsh Government is satisfied that ratepayers can reasonably be expected to comply. The VOA’s evidence to the committee provided further assurance about the work that they are doing to ensure the arrangements are straightforward for ratepayers to engage with. I'm not, therefore, persuaded that further Senedd approval is necessary when we are ready to commence the provisions.

So, in conclusion, I would ask Members to resist amendment 42, and support amendments 4, 6 and 7.

Diolch yn fawr. Peter Fox.

Thank you, and I thank the Cabinet Secretary. On 42, this amendment calls, as we know, for a required draft Order commencing the provisions of section 12 in the Bill, concerning new information duties on ratepayers for hereditaments in Wales, to be approved by Senedd Cymru before they can be made by the Welsh Ministers, as this ensures that there is proper scrutiny and accountability. But I've heard your response.

Thank you, Peter. If no other Members wish to speak, the Cabinet Secretary to reply to the debate.

Just to confirm that the Government amendments in the group are designed to enable consistency for ratepayers in relation to appeals against penalties within the NDR system, as well as a minor technical change. And then, just again on amendment 42, really, to ask colleagues to resist, because, as I set out, the provisions are set out in full and are the subject of ongoing scrutiny and I've provided those clear assurances that we would not commence those provisions until we're satisfied that ratepayers could reasonably be expected to comply, and the VOA is working hard in this space. 

Okay, diolch yn fawr. The question, then, is that amendment 6 be agreed to. Does any Member object? There are no objections. So, amendment 6 is agreed.

I move amendment 7 in the name of the Cabinet Secretary. The question is that amendment 7 be agreed to. Does any Member object? No. Then amendment 7 is agreed.

I move amendment 8 in the name of the Cabinet Secretary. Does any Member object? No. Then amendment 8 is agreed.

Group 7 relates to council tax discounts. The lead amendment is amendment 25, and I call on Peter Fox to move and speak to the lead amendment and other amendments in the group.

Thank you, Chair. There are concerns around the reasonings for the wider powers being sought in section 18 of the Bill, as there are no specific policies in mind. In addition to this, provisions relating to council tax disregards and discounts should be retained by primary legislation. Amendments 26, 27, 28, 29, 30 and 31 will ensure that any regulations in regard to council tax discounts are consulted upon, as well as ensuring that these decisions are transparent and that Welsh Ministers are held accountable. Amendment 32 amends the existing Order-making power of Welsh Ministers to specify the percentage of the discount for chargeable dwellings where there is only one resident of the dwelling, commonly referred to as the single person discount. It is for these reasons that we're asking Members to support these amendments.

Okay, thank you very much, Peter. Luke.

Diolch, Gadeirydd. No additional comments other than just to highlight that we are co-submitting amendments 27, 29 and 31.

Okay, thank you, Luke. Any other Member? No. Cabinet Secretary.

Thank you. Amendment 25 would remove the power for Welsh Ministers to make council tax discount arrangements for Wales in regulations. I set out the rationale for these powers during Stage 1. The amendment would prevent Welsh Ministers from introducing new discounts or ensuring discounts can be targeted to help support the most vulnerable and low-income households across Wales.

The existing arrangements for council tax discounts are a mixture of legislative provisions, which are not as clear as they could be and which don't work particularly well together. Over time, the law has become complex and difficult for households to understand, and also for practitioners to administer. Removing this section from the Bill would disadvantage council tax payers, local authority practitioners and advice services who would benefit from policy changes that simplify complex arrangements. It would also disadvantage some council tax payers from benefiting from any future policy changes that the Welsh Government would wish to make to help vulnerable people or to tackle poverty.

Amendments 26, 28 and 30 would require a consultation before making regulations about council tax discounts. When considering whether to consult with stakeholders and citizens, we take into account the Welsh Government's policy on consultation, and, of course, we act in accordance with common law consultation duties. None of the existing powers for the Welsh Ministers to amend discounts by regulations are subject to a statutory consultation duty. 

Amendments 27, 29 and 31 would also subject those regulations to a superaffirmative procedure in the form of a minimum laying period of 60 days. And as we've talked about, a superaffirmative procedure is only used in exceptional circumstances, where the affirmative procedure is not considered to be sufficient, and I don't believe this to be the case for these provisions. These amendments could disadvantage council tax payers in Wales by delaying or even preventing the provision of new support, especially in emergency situations. In my response to the Stage 1 committee recommendation, I set out an example where we were able to respond quickly to ensure that host households offering accommodation support to people from Ukraine who were seeking safety from the war, didn't lose their entitlement to discounts and incur additional council tax costs as a result. That wouldn't have happened expediently if the procedures that are being described here had applied. The additional procedures would also be disproportionate where only minor administrative amendments are being made to regulations.

And finally, amendment 32 introduces a new section to restate the one-adult discount at 25 per cent, and I've been absolutely clear that Welsh Ministers will restate the one-adult discount at 25 per cent in regulations. So, in conclusion, then, I would ask Members to resist amendments 25, 26, 27, 28, 29, 30, 31 and 32.

Okay. No other Members? Peter to respond.

Thank you, Chair. Thank you, Cabinet Secretary. I'd just like to reiterate the importance of specifying the percentage of the discount on single person occupancy. Often, these people are, through no fault of their own—. They're often elderly, they're in, perhaps, large houses that they can't afford to upkeep, and they can't afford to downsize, and so it's important that they have clarity about what they are likely to be able to get. So, I'm a little disappointed that we can't support the amendments.

Peter, are you moving amendment 25?

Yes, I will. Thank you.

If amendment 25 is agreed to, amendments 26, 27, 28, 29, 30 and 31 will fall. The question is that amendment 25 be agreed to. Does any Member object? [Objection.] There is an objection. We will move to a vote on amendment 25. Will all those in favour please show? And those against. Okay. On amendment 25, there voted two in favour and four against. So, amendment 25 is not agreed. 

Peter, amendment 26.

Yes, move.

Amendment 26 is moved. Does any Member object? [Objection.] There is an objection. We will move to a vote on amendment 26. Will all those in favour please show? And those against. There voted three in favour and three against, so I use my casting vote as Chair against and amendment 26 is not agreed.

Peter, amendment 27.

Yes, move.

Amendment 27 is moved. Are there any objections? [Objection.] There are. We will move to a vote. Will all those in favour of amendment 27 please show? And those against. Okay. There voted three in favour and three against, so I use my casting vote as Chair against and amendment 27 is not agreed.

Peter, amendment 28.

Move.

Amendment 28 is moved. Does any Member object? [Objection.] We will move to a vote. Will all those in favour of amendment 28 please show? And those against. Okay. There voted three in favour and three against. I use my casting vote as Chair against, so amendment 28 is not agreed.

Amendment 29, Peter.

Move.

Amendment 29 is moved. Does any Member object? [Objection.] There is an objection. We will move to a vote on amendment 29. Will all those in favour please show? And those against. Okay. There voted three in favour and three against. I use my casting vote as Chair against, and amendment 29 is not agreed.

Peter, amendment 30.

Move.

It's moved. Any objections to amendment 30? [Objection.] There are. We will move to a vote. Will all those in favour of amendment 30 please show? And those against. Okay. There voted three in favour and three against. I use my casting vote as Chair against, so amendment 30 is not agreed.

Amendment 31, Peter.

Move.

It's moved. Any objections to amendment 31? [Objection.] Yes. We will move to a vote on amendment 31. Will all those in favour please show? And those against. Okay. There voted three in favour and three against. I use my casting vote as Chair against, so amendment 31 is not agreed.

Peter, amendment 32.

Yes, move.

Amendment 32 is moved. Does any Member object? [Objection.] There is an objection. We will move to a vote on amendment 32. Will all those in favour please show? And those against. Okay. There voted two in favour and four against. So, amendment 32 is not agreed.

The eighth group of amendments relates to the publication of notices. The lead and only amendment in the group is amendment 33. I call on Peter Fox to move and speak to the amendment.

Thank you, Chair. This amendment calls for section 20 of the Bill to be removed. This will ensure that changes to council tax notices will continue to be printed in newspapers. While there has been a move of most things online, it is important to note that these online notices are not always accessible to everyone. There are people who rely on the publication of these notices in newspapers. By maintaining this, we will help increase accountability and transparency. I think that we are still in a transition period, where people are moving totally online. There are lot of very elderly people, especially, who don't access online computers and the internet, or don't wish to. Actually, we shouldn't be stopping people having the right to access information in the way that they need it for the sake of modernisation.

Okay. Thank you, Peter. Luke Fletcher.

Diolch, Gadeirydd. Well, I have a lot of sympathy with the Government's intention here. At the end of the day, we are attempting to futureproof a piece of legislation here, and things are moving in a certain direction. But, there is a lot of sympathy as well to be had with local newspapers. There are a number of news outlets that have contacted us as Members to say, quite simply, that the news outlet wouldn't have been profitable if it wasn't for these advertising notices. As the current news landscape in Wales is already pretty thin on the ground, I think that that could pose a problem for us in the future, if we were to see some of these news outlets close as a result of this. So, with that in mind, we will be supporting amendment 33.

Okay. Thank you, Luke. Any other Member? Yes, James.

I want to speak in support of Peter's amendment. As Luke said, I have been contacted by a number of papers, not just in my own constituency, but right across Wales as well, that are concerned that the notices going online will, actually, be detrimental to the viability of a number of local news outlets across the country. As Peter said, there are a number of constituents of mine—and I'm sure yours, Cadeirydd, and others around this table—who don't access everything online. The only way that they do get their news is by newspaper. I think that the way we are pushing this could actually be detrimental to some of the people we serve. I don't want to see that happening, and I also don't want to see the viability of local newspapers being undermined. Not everybody gets their news online. We should respect that, and I think that, actually, more people are going back to papers than are going online because of all the misinformation that is spread online. Sometimes, the only thing that they do trust is what's in the written press, and I think that we do need to respect that. Diolch, Cadeirydd.  

Okay. Thank you, James. Yes, Carolyn.

We did discuss this at committee, and—[Inaudible.]—which is appreciated. But I pointed out that the notices, even with my glasses on, I couldn't read them. They were so small and at the back of the paper, not where people might find them very often. And this Bill, it gives the choice, I think, as well, to local authorities. This is why I support what the Government are doing here. I just wanted to make that point.

Okay, Carolyn. Thank you very much. And the Cabinet Secretary.

Thank you. So, as we've heard, amendment 33 would remove the provision to replace the current requirement for local authorities to publish council tax notices in local newspapers, with a requirement to publish the information electronically. I set out the rationale for these provisions during Stage 1. The statutory requirement for local authorities to publish council tax notices was put in place in 1992, when communicating with citizens was commonly carried out through notices in newspapers. But now, 30 years on, this is widely considered to be an inflexible approach to providing council tax information, and it's been left behind by technological advances and other changes to the tax system. I know that the committee has heard from representatives of local government, newspapers and other organisations during Stage 1, and there has been a range of views put forward by stakeholders on this. 

But I've also previously said at committee sessions that there is already a wide variety of information made available about council tax, for example, in council publications, in public spaces, and also available through third sector agencies. But really, really crucially, all council tax payers will receive information about council tax as part of their annual bill, whether they choose to receive that electronically or in hard copy. So, every council tax payer will get the information they need sent directly to them. It is important, though, that local authorities achieve value for money where public funds are to be used, and that they choose how to provide public information about council tax to communities as they see best. Should authorities wish to continue to use local papers, the Bill doesn't prevent them from doing so at all. I think it is also important to note that the Bill, crucially, places a new duty on local authorities to ensure the information is accessible for people who cannot access a website. I have accepted the committee's Stage 1 recommendation to work with local government to monitor the implementation of this provision.

Finally, I want to make clear that these provisions have not been designed with any future or broader intention to pave the way for removing other types of public notices. Local authorities have called for autonomy in how they plan, tailor and modernise engagement with citizens on council tax matters. So, in conclusion, I would ask Members to resist amendment 33.

Diolch yn fawr. Peter Fox to reply.

Thank you. Councils do have the choice, we know, but I think removing the requirement for them to publish is almost abdicating responsibility as a Government to make sure that the people of Wales—all people of Wales—get access to the information they've got. They can't control what individual councils can do, unless you have the continuation of the expectation that they would publish, and they can go ahead and put online as well, which I'm sure lots of them will do, and I hope they will do, recognising the constituents that they represent. I think it's a retrograde step that wasn't needed. It wasn't needed. I think the Government should have more responsibility to the wider population of Wales.

Okay. Thank you, Peter. You've moved amendment 33.

Yes, I have.

Okay. Amendment 33 is moved. Does any Member object? [Objection.] There is an objection. We will move to a vote on amendment 33. Would all those in favour please show? And those against. With regard to amendment 33, there voted three in favour and three against. I use my casting vote as Chair against, and amendment 33 is not agreed.

Okay. Shall we take a short, 10-minute break at this stage and resume at 10:45?

Welcome back, everyone, to this meeting of the Local Government and Housing Committee and our Stage 2 consideration of the Local Government Finance (Wales) Bill. We've reached group 9, which relates to council tax revaluation. The lead amendment in this group is amendment 2. 

I move amendment 2 in the name of the Cabinet Secretary and call on the Cabinet Secretary to speak to the lead amendment and other amendments in the group.

Thank you. I'll speak first to the Government's amendments 2 and 3. Both of these amendments would enable the introduction into law of regular revaluation cycles for council tax every five years, starting from 2028. Members of the committee will know that we're committed to exploring ways to make council tax fairer and less regressive, and we've published a great deal of evidence about our considerations in partnership with the Institute for Fiscal Studies. We've also released two consultations, in 2022 and 2023, seeking views on proposals as part of our co-operation agreement with Plaid Cymru.

In our recent phase 2 consultation, we engaged with the public and stakeholders on the scale and the pace of reform, and we gave a choice of time frames for a revaluation and changes to the council tax bands. When this Bill was introduced, one of the choices for the start of regular revaluation cycles could have been 2030 if we'd followed the fastest option for the pace of reform by using secondary legislation to implement a revaluation in 2025. However, other time frames were also offered in the consultation. Now that we've concluded that consultation and we've decided the way forward, we're proceeding in line with the most popular view from respondents on the pace of reform. The consultation was clear: citizens and stakeholders preferred a slower time frame, with the next revaluation in 2028, but I do want to create that clear and definite path towards that in this Bill. It's worth noting that it would no longer be feasible to deliver a council tax revaluation in time for 2025. This is a really large-scale operational exercise involving independent bodies and local government, and, of course, and importantly, it wouldn't be possible now to design and implement a transitional relief scheme to support households through the change.

In more detail, amendment 2 would limit the Welsh Ministers' existing power to carry out a revaluation later than April 2027. Amendment 3 would then set 2028 as the year in which the first council tax valuation list should be compiled under the provisions introduced by the Bill. Introducing regular council tax revaluation cycles every five years will keep council tax fair and responsive to economic circumstances. It will provide regular opportunities for taxpayers to engage with the revaluation process, improving the transparency of how things work. Placing regular updates on a statutory footing will also provide much-needed clarity for taxpayers and local authorities.

Turning to the remaining amendment in this group, tabled by Peter Fox, amendment 34 would require the publication of a policy statement outlining transitional relief arrangements for council tax revaluations. This amendment wouldn't be appropriate in this Bill. Proposals for transitional relief are policy decisions taken by the Welsh Government at each council tax revaluation, taking into account responses to any consultation on proposals. Those proposals would need to be developed in response to the data gathered in each revaluation exercise, the broader financial context for people and for local authorities, and the finances available to support the costs of a scheme. So, in conclusion, I would ask Members to resist amendment 34 and support amendments 2 and 3.

Okay. Diolch yn fawr. Peter Fox. 

Thank you, Chair, and thank you, Cabinet Secretary. Amendment 34 was a probing amendment, really, seeking more clarity, which you've given now. So, Chair, I won't be putting that forward for a vote. 

Okay. And the Cabinet Secretary to respond, if there's anything further you wish to say. 

Just to say that the Government amendments in this group would enable five-yearly council tax revaluations to take place from 2028, and that was the view of the citizens and stakeholders—certainly the majority view—in our recent consultation. Amending the Bill shows that we are listening to the people of Wales. I'm grateful to Peter Fox for his comments around amendment 34.

Okay. Diolch yn fawr. The question, then, is that amendment 2 be agreed to. Does any Member object? [Objection.] Yes. We will, then, move to a vote on amendment 2. Will all those in favour please show? And those against. Okay. There voted five in favour and one against with regard to amendment 2, so amendment 2 is agreed.

I move amendment 3 in the name of the Cabinet Secretary. The question is that amendment 3 be agreed to. Does any Member object? [Objection.] There is an objection. We will move to a vote on amendment 3. Will all those in favour please show? And those against. There voted five in favour and one against with regard to amendment 3, so amendment 3 is agreed.

Peter, you've indicated that you do not wish to move amendment 34. Does any other Member wish to move that amendment? No. Then amendment 34 is not moved. 

Group 10 is on council tax increases. The lead amendment in this group is amendment 35. I call on Peter Fox to move and speak to the lead amendment and the other amendment in the group. 

Thank you, Chair. These amendments will require a local referendum to be called in prescribed circumstances, as council tax increases will have a direct impact on all citizens in Wales. It is for this reason that their voices and the voices of councils should be heard when these decisions are made. In addition to this, holding these local referendums will help to increase transparency and accountability of potential council tax increases. 

Chair, we know that this is something that is already happening in England, and because of that, we've seen council tax rises averaging about 5.1 per cent last year in England and 7.8 per cent in Wales, with some councils consulting on 25 per cent council tax increases. These sorts of things can't go on any longer and there needs to be an opportunity for the people of Wales to have a voice in what they do regarding council tax. That's why we believe a referendum is the right way in certain circumstances, hence the amendments brought forward.

Thank you, Peter. Do any other Members wish to speak? Luke.

I just wanted to make the point that I am sympathetic to the argument that's put forward here, but there is a risk, of course, that by going down this route you're only then adding additional pressures to local government finance and capacity, which I would see as being counterproductive to what we're talking about. I think the main thing that we should be doing, actually, is ensuring that local government is financed correctly in the first place so that we wouldn't have to go down this route. So, on this occasion, we'll be opposing these amendments, but I thought it important to make that point.

Thank you, Luke. Any other Members? No. Cabinet Secretary. 

Amendment 35 would place a new duty on Welsh Ministers to make regulations requiring billing authorities in Wales to hold local referendums about council tax increases that exceed 5 per cent. I regard this amendment as a significant deviation from the Welsh Government’s long-standing and celebrated approach to localism. Also, no consultation with taxpayers or stakeholders has happened leading up to this point.

In Wales, we have a relationship with local authorities based on mutual respect, and it's important that local authorities have the freedom to set their own spending priorities and council tax levels. They are independent statutory authorities responsible for managing their own financial affairs, and local authorities, of course, are democratically elected to make these important decisions.

Local referenda were introduced in 2012 in England to control budget-setting procedures and restrict local government democratic accountability. But to date, no council in England that has held a referendum has been able to proceed with its original budget needs, adding cost and time to the annual process. It's been the experience in England since 2012 that setting limits in this way effectively becomes a target for local authorities to raise council tax to the maximum allowed, rather than carefully considering what's necessary.

Local authorities in Wales have flexibility in setting their budgets and determining council tax levels, enabling them to respond to local priorities and pressures. This is an important feature of local democracy and makes local authority leaders accountable to their residents for their decisions. It's not for the Welsh Government to intervene in this democratic process.

And finally, it's also important to recognise that the complexity and costs of holding local referenda place an additional burden on local authority resources, which would further exacerbate the financial pressures currently faced by them, as Luke Fletcher has set out. Amendment 43 is consequential on amendment 35, and I would ask colleagues to resist amendments 35 and 43.

Diolch yn fawr. Peter Fox.

Thank you. I knew what the answer would be. I think Luke hit it on the head in many ways: we have not got a sustainable way of funding local authorities at the moment, and the default position is to fall back on leaders of councils to have no choice but to inflate council tax above and beyond. I've been there, I know what it works like, but I had a rule I wouldn't go above 5 per cent. When the people hold to account an authority, it taxes the authority officers to go back and find other ways of doing it. I've seen less mature councils, inexperienced councils, being forced into raising council tax. I know that's their democratic right and the people will hold them to account, but there's got to be a point where we say, 'When's enough enough? How much more can people afford to keep bearing?' That's why it's so important we find a sustainable way to fund local authorities, which isn't dependent on going back to the people all the time, to put their hands in their pockets. So, I'm disappointed that this hasn't been accepted, but I will continue to make the case for the people of Wales.

Amendment 35 is moved. Does any Member object? [Objection.] There is an objection. We will move to a vote. With regard to amendment 35, will all those in favour please show? And those against. There voted two in favour and four against with regard to amendment 35. Therefore, it is not agreed.

Group 11 relates to council tax reform. The lead and only amendment in the group is amendment 45, and I call on Luke Fletcher to move and speak to that amendment. 

Diolch, Cadeirydd. Of course, this is linked to the discussion that we had in group 9, so I think it would be remiss of me not to set out the disappointment that's felt by many, not just in my own party but outside of my party as well, that we haven't been able to progress with council tax reform at the speed that is really needed. Because we, I think, are all in agreement that council tax, as it currently stands, is an incredibly regressive form of taxation. It penalises those who can least afford to pay that tax. We had a real opportunity here, I think, through the co-operation agreement and within this Bill, to really do something that would be quite revolutionary for a lot of people, to free up a lot of finances for people who are really struggling at the moment, especially during the cost-of-living crisis. I know the Cabinet Secretary paid tribute to Cefin Campbell at the start; I would echo that as well. I know he's done a lot of work on this, and he's as disappointed as I am that we haven't been able to progress at the speed that we would've liked.

I do take on board some of the stuff that the Minister had said in group 9 in relation to a transitionary period, that the time has really gone against us here. And on that basis, I would reluctantly, though I think, in this case, perhaps not sensibly—. It makes sense to withdraw this amendment, given how quickly time has passed and how we've run out of time, essentially, to do the reforms that we really should've done. But I thought it'd be important just to express that disappointment that we haven't been able to progress with this part. It would've meant a lot, I think, for a lot of people.

Thank you very much, Luke. Does any other Member wish to speak? Cabinet Secretary.

Just to say that I fully understand and respect Luke Fletcher's position and the sincere desire, I think, of many colleagues who would want to go as far and as fast as we can on the journey of council tax reform, because as Luke Fletcher set out, it is a regressive form of taxation. I think our ambition has come up against reality in some senses, in terms of the cost-of-living crisis and what that might mean for households that see an increase in their bills, and then also the operational challenges that local government were telling us that they would face to be able to get to that point of 2025. As Luke Fletcher has set out, the window now, I think, has passed for being able to achieve 2025 in any case. It is a really large-scale operational exercise, with many bodies involved, and it wouldn't be possible now to deliver for April 2025. And also, critically, we would want to consider what transitional support might be needed by households that would see an increase in bills, bearing in mind that it's been so long since the last revaluation, now that, again, we're not in a position now to develop that transitional support scheme. And clearly finances are quite constrained at the moment as well, so that might have an impact on the choices that we would be able to make. But I'm grateful to Luke Fletcher for testing this amendment today and the sincerity that lies behind it.

Diolch yn fawr. Luke, did you want to respond?

It is disappointing that we can't progress with this. I completely understand now that obviously this is a complex change that we are talking about. It's fairly easy to just say that we need to reform council tax, but the reality of it is very complex and I think that's been reflected by the Cabinet Secretary. I would just say that, of course, even though it is complex and it is going to be hard, anything worth doing is usually quite hard to do, so I would hope that, given that we have now a date that the Government has put forward to implement some form of reform when it comes to council tax, we stick to that date and that we don't renege on that date, because as I mentioned earlier, a change of this magnitude would mean so much to so many people.

Thank you, Luke. Luke Fletcher has indicated that he wishes to withdraw amendment 45. Does any Member object to its withdrawal? No. Amendment 45 is withdrawn.

Group 12 relates to revaluation preparedness. The lead and only amendment in this group is amendment 36, and I call on Peter Fox to move and speak to the amendment. 

Thank you, Chair. This is a probing amendment to call for the Cabinet Secretary to clarify the arrangements in place between (1) the Welsh Government and (2) the Valuation Office Agency and the Valuation Tribunal for Wales, under which the Welsh Government monitors the capacity of those bodies in relation to revaluations and challenges arising from them. So I'm really seeking more confidence around those areas, Chair.

Thank you very much, Peter. Does any Member wish to speak? No. Cabinet Secretary.

Amendment 36 would require Welsh Ministers to publish a statement on their assessment of the arrangements to monitor the capacity of the VOA and VTW in respect of NDR and council tax revaluations and supporting measures. I would say that this amendment isn't necessary, because, as I set out in response to the Stage 1 recommendation from the committee, which I accepted, we have measures in place to monitor the capacity and preparedness of our delivery partners. Specifically, we've got established sponsorship arrangements for the VTW and we also have annual service level agreements with the VOA. We've got long-standing arrangements in place to monitor the capacity and delivery of both organisations, and both of those organisations also provide annual reports and they monitor delivery against key performance indicators as well. For those reasons, I would ask Members to resist amendment 36.

Thank you, Cabinet Secretary. Peter Fox to respond.

Thank you, Chair. As I said, it was a probing amendment looking for clarity, and I think you've given the clarity of what you will be doing to monitor those organisations. With that in mind, Chair, I'll remove 36. I don't wish to vote on 36.

You would like to withdraw. The question is whether or not amendment 36 is withdrawn. Does any Member object to its withdrawal? No. Then amendment 36 is withdrawn.

Group 13 relates to the review on the use of powers. The lead amendment in this group is amendment 37. I call on Peter Fox to move and speak to the lead amendment and the other amendment in the group. 

Thank you, Chair. These amendments will require the Welsh Ministers to undertake a review of the powers proposed in sections 5, 9, 10 and 18 of the Bill and to publish the conclusions of that review by the end of 2029, as it will be important for these powers to be reviewed against the policy aims that are yet to be set out. It is for this reason that I'm encouraging Members to support these amendments.

Okay, thank you very much, Peter. Does any other Member wish to speak? No. Cabinet Secretary.

So, as Peter Fox says, amendment 37 would require the Welsh Ministers to undertake a review of the use of the regulation-making powers introduced by the Bill. In response to the Stage 1 recommendation from the committee, which I accepted in principle, I confirm that we will amend the explanatory memorandum after Stage 2 to include a commitment to undertake a post-implementation review of the operation and the impact of the legislation before the end of the seventh Senedd. And this will include consideration of the relevant subordinate legislation-making powers within the Bill.

Agreeing piecemeal reviews of individual pieces of legislation is unnecessary and partial, and the Senedd would of course be able to undertake post-legislative scrutiny, should it choose to do so. So, I hope that the confirmation that I've given in terms of amending the explanatory memorandum after Stage 2 gives confidence to the committee today. And amendment 40 is consequential on amendment 37. So, I would ask colleagues to resist amendments 37 and 40.

Diolch yn fawr. Peter.

Thanks, Chair, and thank you, Cabinet Secretary. I've basically put these forward to support the Legislation, Justice and Constitution Committee, who had the same concerns. I hope Members will perhaps consider it, and consider what that committee said. I don't think I need to add any more, Chair. Thank you.

No, so do you move amendment 37, Peter?

Yes, I will.

Yes, okay. Amendment 37 is moved. Does any Member object? [Objection.] There is an objection. We will then move to a vote. Would all those in favour of amendment 37 please show? And those against. Okay, in relation to amendment 37, there voted three in favour and three against. I use my casting vote as Chair against, so amendment 37 is not agreed.

Peter, amendment 38.

Yes, move.

Amendment 38 is moved. Does any Member object? [Objection.] There is an objection. So, with regard to amendment 38, will all those in favour please show? And those against. There voted three in favour and three against, so I use my casting vote as Chair against, and amendment 38 is not agreed.

Amendment 39, Peter.

Move.

Amendment 39 is moved. Does any Member object? [Objection.] There is an objection. Will all those in favour of amendment 39 please show? And those against. There voted three in favour, and three against. I use my casting vote as Chair against, and so amendment 39 is not agreed.

Amendment 40.

Move.

Amendment 40 is moved. Does any Member object? [Objection.] We'll move to a vote on amendment 40. Will all those in favour please show? And those against. There voted three in favour and three against. I use my casting vote as Chair against, so amendment 40 is not agreed.

I move amendment 4 in the name of the Cabinet Secretary. The question is that amendment 4 be agreed. Does any Member object? There is no objection, therefore amendment 4 is agreed.

Peter, amendment 41.

Yes, move.

Amendment 41 is moved. Does any Member object? [Objection.] There is an objection, so we will move to a vote on amendment 41. Will all those in favour please show? And those against. There voted three in favour and three against. I use my casting vote as Chair against, so amendment 41 is not agreed.

Amendment 43.

Move.

Amendment 43 is moved. Does any Member object? [Objection.] There is an objection. We will move to a vote on amendment 43. Will all those in favour please show? And those against. There voted three in favour and three against. I use my casting vote as Chair against, so amendment 43 is not agreed.

Peter, amendment 42.

Yes, move.

Amendment 42 is moved. Does any Member object? [Objection.] There is an objection. We will move to a vote on amendment 42. Will all those in favour please show? And those against. There voted three in favour and three against. I use my casting vote as Chair against, so amendment 42 is not agreed.

Okay, that takes us to the end of our consideration of these Stage 2 amendments. Thank you very much, Cabinet Secretary, and your officials, for your attendance. You will be sent a transcript of the meeting to check for factual accuracy. As Stage 2 proceedings are now completed, Stage 3 will begin tomorrow, and the relevant date for Stage 3 proceedings further to that will be published in due course.

Standing Orders make provision for the Cabinet Secretary to prepare a revised  explanatory memorandum taking account of the amendments agreed today. The revised memorandum should be laid at least five working days before Stage 3 proceedings. Thank you all very much indeed.

Okay, the next item on our agenda today is a motion to exclude the public in order to discuss items relating to the committee's forward work programme and remit, but as we only have two substantive members, regular members of the committee, in attendance today, I wonder if our Members here today would be content to defer these items until our next meeting, which is on 20 June, when more of our substantive regular membership will be in attendance. Are you content to do that? I think it probably makes sense in terms of continuity with committee business and proceedings.

Okay, that's fine. Thanks very much. There will be no need then to move into private session, and I close the meeting. Thank you all very much indeed.