Plaid Cymru calls for £1bn rail investment and business VAT cuts in Budget

Mark Mansfield

Plaid Cymru has called for at least £1 billion of investment in Welsh railways and a cut in VAT for hospitality, hair and beauty businesses in next week’s UK Budget.

The party’s Treasury spokesperson, Ben Lake MP, has written to Chancellor John Healey seeking additional support for households and public services, alongside measures to tackle what the party describes as decades of underinvestment in Wales.

Mr Healey will deliver the Budget on Wednesday, October 28, the first under Prime Minister Andy Burnham.

In his letter, Mr Lake welcomed the UK Government’s endorsement of a £14 billion programme for Welsh rail infrastructure but said only £302 million had been allocated over the next four years.

He called for at least £1 billion to be committed during the current Spending Review period, which runs to 2029-30.

According to the letter, Wales has 10% of the rail network but received only 1.5% of UK rail investment over the past 15 years. Mr Lake said the current allocation represented just 1% of Network Rail spending across England and Wales.

“The Prime Minister says he wants growth in every postcode, yet when it comes to Wales, he too often seems more interested in telling the Welsh Government to act than using the powers and resources available to his own Government,” he said.

Plaid is also seeking additional funding for public services. Mr Lake warned that the Welsh Government faced a 0.7% real-terms reduction in day-to-day spending next year.

He urged the Treasury to cover the full public sector cost of the employer National Insurance increase introduced in April 2025, and to give Welsh ministers greater freedom to draw on the Wales Reserve.

The party wants targeted help with energy bills, including a social tariff for vulnerable customers and immediate relief for households using heating oil and other off-grid fuels.

Mr Lake also called for regulation of the heating oil market, an end to the freeze on Local Housing Allowance to help people on low incomes meet private rental costs, and removal of the overall benefit cap.

For hospitality, hair and beauty businesses, Plaid is proposing a reduction in VAT from 20% to 10%.

Mr Lake said rising costs were restricting employers’ ability to create jobs and offer apprenticeships. He argued that halving VAT would help businesses remain viable and provide more opportunities for young people.

“The strongest tools to drive growth, strengthen public services and improve people’s lives still sit in Westminster,” he said.

“The question is whether the UK Government has the political will to use them for Wales.

“For too long, Wales has been short-changed. This Budget must be the moment the Labour UK Government starts matching its promises with delivery.”

Capital gains tax

According to the Times, Mr Healey has ruled out increasing capital gains tax following warnings that a rise could prompt people to delay selling assets or move abroad, reducing the revenue raised.

An increase in taxes on bank profits has been widely reported as a possible means of funding cost-of-living support for households and businesses.

Conservative leader Kemi Badenoch, meanwhile, is urging the Government to reduce spending and borrowing. Her party has proposed £70 billion of spending cuts, including reductions in welfare spending and Civil Service staffing.

---

Get more trusted Welsh news

Choose Nation.Cymru as a preferred source in Google News to see more of our journalism.