Paul Silk warns against taking over Welsh Government’s tax bill


POWERS that should belong to the Senedd risk being taken over by the Welsh Government, a former senior civil servant has warned.

Paul Silk, a former Clerk of the National Assembly who in 2011 led a committee on further devolution, delivered the opinion on the previously dormant area of ​​Welsh taxation.

When the government first used the new powers in 2018, the charges introduced were hailed as the first Welsh taxes in nearly 800 years.

But, despite being an important historical footnote, there was not much excitement as the charges replaced existing UK taxes. The Landfill Tax became the Landfill Disposals Tax and, more relevant to more people in their daily lives, the Stamp Duty, paid when buying a house, became the Land Transaction Tax.

But exciting headlines and industry complaints about a possible tourism tax aside, little attention has been paid to Welsh taxing powers.

In last year’s Senedd election, Welsh Labor policy on the use of income tax powers was again to cast the issue in the long grass.

He had previously ruled out using the powers ahead of the 2021 election and last year promised not to ‘take more’ from families while the economic impact of Covid lasted.

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But this week two Senedd reports were published questioning the Labor government’s approach to tax law – in particular how its ministers would be given the power to change tax law with little scrutiny from the Senedd.

Finance Minister Rebecca Evans is currently pushing through new tax legislation, but the Finance Committee and the Legislation, Justice and Constitution Committee are concerned that the government wants to limit the ability of back-to-back ordinary MPs -ban to influence, shape and ultimately modify Welsh taxation. regulations.

Silk, who in addition to having been Clerk of the National Assembly from 2001 to 2007, served as Clerk of the House of Commons before and after his time in Cardiff Bay, warned the Finance Committee that the Bill is ” another example of the executive “taking over functions which, in my opinion, belong to the legislative branch” and in the particularly controversial area of ​​taxation.

These concerns, as Silk and other experts who testified before the committee have pointed out, echo those at Westminster, where the UK government has also been accused of seeking to limit the role of Parliament by using delegated powers, those held by ministers, to change legislation. .

The matter for the Senedd Committees is the Welsh Tax Laws etc. Bill. (power to amend).

In its current form, it would give ministers the power to quickly change Welsh tax laws using regulations – often referred to as ‘secondary legislation’ – which would save the government from having to pass primary legislation in the Senedd (which is particularly relevant as no party has ever had a genuine majority of at least 31 seats).

The government’s bill would also give ministers the power to change Welsh tax laws using “secondary legislation” and only allow the Senedd to accept or reject the new law. It would also allow ministers to change the law with immediate effect, before seeking Senedd’s approval.

As Silk told the committee: “Governments naturally want the fewest obstacles in their way and will often favor secondary legislative avenues if possible. It is up to the legislator to ensure that the appropriate controls are maintained and that it does not give up its legislative role.

The warnings appear to have been directed as both reports raised concerns that this approach would marginalize the Senedd, with both committees favoring the development of a longer-term package of legislation, such as a finance bill, to submit tax proposals.

Labour’s Huw Irranca-Davies, who chairs the legislation committee, was unimpressed with Evans’ arguments for more government power. He said: ‘The justification given by the minister for the proposed approach is inadequate and the committee agrees that the bill gives far too much power to Welsh ministers at the expense of the role of the Senedd.’

The legislation committee recommended that the bill be amended to include a so-called “sunset provision” whereby the power given to the government to make regulations automatically expires after July 2027.

“If the Welsh Government is determined to move forward with this Bill, the committee is clear that it should respond positively to our recommendations, in particular, to include a ‘sunset provision’.

“This will give the Welsh Government time to develop more appropriate approaches involving the use of primary rather than secondary legislation,” Irranca-Davies said.


Meanwhile, the Finance Committee questioned the Welsh Government’s justification for seeking to make retroactive changes to Welsh tax laws, due to the uncertainty this would create within the Welsh tax system.

To protect taxpayers’ rights, the committee concluded that retroactive changes should be limited in certain circumstances, for example no later than the date of the earlier UK tax change or the date of an official Welsh government announcement.

Plaid Cymru’s Peredur Owen Griffiths, chairman of the finance committee, said a majority of the committee’s four members were happy the bill was moving to the next stage, but he urged the government to consider his recommendations. Conservative Peter Fox was the only MP not to support the bill moving forward.

Griffiths said: “Fiscal decentralization is a relatively recent development in Wales and as the Welsh tax system matures it is important that the Senedd are satisfied that developments are proportionate and in line with democratic principles.

“We have reservations about the Bill’s approach and believe the Senedd must be given the best possible chance to scrutinize and influence new tax laws instead of letting the Welsh Government change tax laws as and when he hears it.”

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