Cynulliad Cenedlaethol Cymru

Welcome to the Constitutional and Legislative Affairs Committee, Monday 22 January 2018. There are no apologies today. We have a full committee, and can I welcome Mandy Jones to membership of this committee, which I hope you find interesting and very useful?

Thank you.

Just to deal with the housekeeping matters, in the event of a fire alarm, Members should leave the room by the marked fire exits and follow instructions from the ushers and staff. There is no test forecast for today. All mobile devices are to be switched to silent. The National Assembly for Wales operates through both the Welsh and English languages. Headphones are provided through which instantaneous translations may be received. For any that are hard of hearing, these may also be used to amplify sound. Do not touch any of the buttons on the microphone as this can disable the system. Ensure that the red light is showing before speaking. Interpretation is available on channel 1 and verbatim on channel 2.

So, we move straight on to item 2, instruments that raise no reporting issues under Standing Order 21.2 or 21.3. These are the Building (Amendment) (Wales) Regulations 2017, the Regulated Services (Penalty Notices) (Wales) Regulations 2017, and the Land Transaction Tax (Administration) (Wales) Regulations 2018.

Then we move on to the affirmative resolution instruments: the Land Transaction Tax (Specified Amount of Relevant Rent) (Wales) Regulations 2018, the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 (Amendment to Schedule 5) Regulations 2018, the Landfill Disposals Tax (Tax Rates) (Wales) Regulations 2018, and the Land Transaction Tax (Transitional Provisions) (Wales) Regulations 2018. 

Are there any comments on any of these from the lawyers? Anything from the Members?

I'm content too.

We'll move on, then, to item 3, instruments that raise issues to be reported to the Assembly under Standing Order 21.2 or 21.3. Affirmative resolution instruments: the Land Transaction Tax (Tax Bands and Tax Rates) (Wales) Regulations 2018. There are a number of papers with these: the regulations, the explanatory memorandum and the report. These regulations specify the first tax bands and percentage tax rates for the land transaction tax, which is introduced by the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017.

Can I first of all ask the lawyers to report?

Yes, just a couple of interesting points. First, these are the first regulations setting the tax bands and tax rates for the new land transaction tax in Wales, and those bands and rates are being set out in the Schedule to the regulations, on pack pages 11 and 12. They'll apply from 1 April 2018, though some land transactions will still be subject to stamp duty land tax as part of transitional arrangements. These follow the affirmative procedure. Any regulations that change the bands and rates in future will be subject to the provisional affirmative procedure. So, a slightly different procedure, but that affirmative element will still be there for future changes.

And finally, the regulations refer to 'NRL zero rate band', which is in the Schedule. It's not defined in the regulations. The definition is tucked away in paragraph 28 of Schedule 6 to the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017, and there's no cross-reference to that Schedule 6, paragraph 28 in either the regulations or the explanatory note or the explanatory memorandum. So, in these regulations, in the Schedule, you see some form of land transaction that has a tax rate of zero, but you have to do a bit of digging around to work out exactly what it is, and not everyone reading these regulations will be a tax expert and know exactly where to look.

Issues like this are bound to crop up on a fairly regular basis in future, so the committee may want to consider how it wants to deal with these kinds of issues, going forward.

Okay. Any comments from Members?

I have to say, I think the Government's explanation is particularly obdurate and unhelpful. Unless you're a tax lawyer, you would not be able to work anything out. It borders on the—. Well, perhaps I shouldn't go any further, but if they are committed to making law as accessible as possible, then this is where you see—. This is the test, isn't it? From this response, they've got absolutely no intention of changing current custom and practice.

The best we can do, I suppose, is to go back and say that we are extremely disappointed, that we think this does contradict the concept, we fail to understand, and we'll ask them to give further consideration to this. 

And a short but simple footnote in the regulations would do the trick.

Yes.

Yes. Yes, absolutely.

Yes.

Okay, item 4, papers to note. The letter from the Secretary of State for Wales to the Llywydd on the European Union (Withdrawal) Bill. I think this is a letter—. Almost an identical letter that went to Welsh Government has gone to the Llywydd, and then copied to this committee and also to Dai Rees's committee. This is a matter, perhaps, we can consider further in private session.

Paper 6, written statement by the Welsh Government on the EU withdrawal Bill, which effectively relates to the continuity Bill. It makes reference to the Welsh Government sending the Bill to the Llywydd for determination if the UK Government doesn't make appropriate amendments.

Paper 7, which is a letter from the Cabinet Secretary for Energy, Planning and Rural Affairs with regard to the Agricultural Wages (Wales) Order 2017. That's a matter we can deal with in private session, but, just for the record, I will not participate and I'll exclude myself from the room for that particular item.

Paper 8, which is a written statement by the Welsh Government on the Trade Bill 2017-19. Members are invited to note the statement.

Noted.

Okay. On the Interparliamentary Forum on Brexit, the second meeting was on 18 January 2018. There is, attached there, a formal statement from the forum. There will be a note—a more detailed note—of the discussion that took place there. It was, I thought, a very useful meeting, but I will defer any discussion on it until Members have actually had a full note of more details about the issues that arose there, if that's satisfactory.

Yes, great.

And then item 5, a motion under Standing Order 17.42 to resolve to meet in private session. Has anyone moved that?

Agreed.

Agreed. Okay, so we now move into private session.