Plaid Cymru calls for urgent action over cost-of-living crisis

Plaid Cymru has called on the UK Government to take urgent action in its upcoming Autumn Budget to tackle the ongoing cost-of-living crisis.

The party’s Westminster leader, Liz Saville Roberts MP, said that while the crisis began under the Conservative government, “people aren’t any better off under Labour today either”.

Plaid set out a series of proposals, including renewed energy bill support, scrapping the bedroom tax, uprating Local Housing Allowance, and introducing an “Essentials Guarantee” to ensure those on the lowest incomes can afford food and heating.

It also criticised Labour’s decision to increase Employers’ National Insurance contributions, warning it would add pressure on public services and small businesses.

Tax changes

Instead, Plaid has proposed tax changes including a 2% annual wealth tax on assets over £10 million and aligning Capital Gains Tax with income tax rates.

Ms Saville Roberts said: “The significant fall in living standards due to the rapid increase in the price of essential goods and services may have begun under the Tories, but people aren’t any better off under Labour today either. While ordinary people are struggling to make ends meet, large corporations and the ultra-wealthy are racking up eye-watering profits.”

According to National Energy action, around 25% of households in Wales are in fuel poverty, and research by the Bevan Foundation suggests 70,000 households in Wales face a gap between rent and social security payments.

Plaid says its proposals would provide “direct support” to households while addressing wealth inequality.

Significant steps

The UK Government has defended its approach, saying it has already taken significant steps to support households. Measures include increases to the National Living Wage, pensions and benefits, the continuation of the Warm Homes discount, and a freeze on fuel duty.

Ahead of the budget, reports suggest the Treasury is considering a tax increase on landlords by imposing national insurance on rental income ahead of Rachel Reeves’ autumn budget.

Officials are said to be looking at proposals to hike a levy on property earnings in the hope of raising £2 billion as the Chancellor searches for ways to raise cash amid dire warnings about the state of the public finances.

Allies of Ms Reeves are said to have argued the proposals avoid breaking the Labour pledge not to raise VAT, income tax or NICs because they mark an expansion of the income to which this levy is applied, rather than an increase in its rate, and could generate around £2 billion.

Officials are seeking to explore ways to raise revenue without crossing these three “red lines,” which limit Ms Reeves’ options when it comes to balancing the books.

Challenge

The scale of the challenge facing her in the autumn budget was illustrated by the NIESR economic think tank warning this month that Ms Reeves is set for a £41 billion shortfall on her self-imposed rule of balancing day-to-day spending with tax receipts in 2029-30.

A Treasury spokesperson said the best way to strengthen the public finances was by growing the economy, adding: “Changes to tax and spend policy are not the only ways of doing this, as seen with our planning reforms, which are expected to grow the economy by £6.8 billion and cut borrowing by £3.4 billion.

“We are committed to keeping taxes for working people as low as possible, which is why at last autumn’s budget, we protected working people’s payslips and kept our promise not to raise the basic, higher or additional rates of income tax, employee national insurance, or VAT.”

The next autumn budget is expected to be in late October or early November and will set out the Labour Government’s fiscal priorities.