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Welsh Government could raise taxes to avoid austerity ‘choice’ say Plaid Cymru

13 Dec 2022 4 minute read
Llyr Gruffydd. Picture by the National Assembly (CC BY 2.0).

Plaid Cymru’s finance spokesperson Llyr Gruffydd MS has urged the Welsh Government to explore using the tax raising powers at its disposal to protect public services from the cost-of-living crisis.

Speaking ahead of the publication of the draft Budget for 2023-24 later today, Mr Gruffydd said while Wales’ fiscal powers was limited, it was “not powerless”, adding that the impact of the cost-of-living crisis on household finances and public services was further “proof” that Westminster would never work for Wales.

Describing austerity as a “political choice that must be rejected”, he called on the government to explore the progressive use of tax varying powers to protect public services and improve public sector pay.

“Thousands of families are no longer able to afford to heat their homes or feed their children. Our NHS is at a crisis point with patients waiting days at A&E and nurses forced to use foodbanks. Public services are on their knees,” he said.

“This is the devastating impact of Westminster’s economic crisis on our communities and yet more proof – if we needed it – that Westminster will never work for Wales.

“The Tories will try to claim that cuts are inevitable – but they are a political choice and must be rejected. And, after over a decade of austerity, underinvestment, and plummeting living standards there’s nothing left to cut but basic services.”

‘Trashing’

Llyr Gruffydd added that the government should “leave no stone unturned” to protect people from some of the worst effects” of what he said was a “Tory- orchestrated economic crisis”.

“The Welsh Government’s draft budget will no doubt be driven by the need to deal with Westminster’s trashing of our economy,” he said.

“The fiscal powers we have to respond to this crisis may be limited – but that doesn’t mean we are powerless. That’s why the Welsh Government should explore how progressive use of tax varying powers could be used to protect public services, improve the pay offer for hardworking public sector workers, and help people suffering the most during this crisis.

“The Government must leave no stone unturned to protect people from some of the worst effects of this Tory- orchestrated economic crisis.

“Plaid Cymru will continue to support the most vulnerable in our society, stand in solidarity with those on strike for better pay and work conditions; and continue to fight for a better future for our communities.”

Frontline services

Minister for Finance and Local Government Rebecca Evans said that despite the “challenging economic and fiscal context”, they remained fully committed to doing all they could to protect the frontline public services that people rely on.

“I am pleased to be able to maintain our commitment to social care workers, and I will be saying more about how we will protect public services when I announce the full details of the Budget later today,” she said.

Deputy Minister for Social Services, Julie Morgan added: “We were proud to be able to provide additional funding in last year’s budget to give social care staff across Wales a much-need pay rise. This further uplift will help to support recruitment and retention.

“Social care continues to face considerable pressure. We are doing all we can to work towards improving employment terms and conditions for the sector.”

Costly

Chancellor Jeremy Hunt announced last month that the Welsh Government was to receive £1.2 billion in extra funding as part of a package of measures to stabilise the economy.

The Welsh Government’s budget is now understood to be worth around £3 billion less in real terms than when it was set after the October 2021 spending review.

Other pressures include the increasing cost of social care, homelessness provisions, and public transport which has become more costly due to there being lower demand.

The number of households in financial difficulty and therefore in need of emergency payments has also increased, the government said.

Wales Fiscal Analysis (WFA), a research body within Cardiff University’s Wales Governance Centre, calculates potential losses due to inflation, even after additional funding, at more than £800 million in 2023-24 and £600 million in 2024-25.

The WFA has suggested that if the Welsh Government used devolved income tax powers to increase rates of income tax by 1p it could increase its budget by 1.4% next year and the year after.


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Kerry Davies
Kerry Davies
1 month ago

Until the Senedd has more tax powers than simply increasing income tax then it is simply transferring the burden from UK budgets to Welsh income tax payers. With real wages falling, profits soaring and inequality widening this does not seem a good time to be levelling down.

hdavies15
hdavies15
1 month ago
Reply to  Kerry Davies

Boys and girls on big pay packets, such as Senedd members, might be content to have an additional levy on their pay and benefits. Us mugs living on State pension and small works pension would be reluctant to let these jokers have any more to waste on pet projects.

hdavies15
hdavies15
1 month ago
Reply to  hdavies15

Class system alive and well on here this morning. Ordinary members of the public are being taxed too much and over charged for basic utilities and food, for starters. Yet some people feel that letting loose the government and big business axis of greed is somehow good for us.

Neil Anderson
Neil Anderson
1 month ago

Llyr Gruffydd is quite right. The Welsh Government does have the power to give more support our fellow citizens who are struggling with cold, poverty and other hardships. But the WG has one hand tied behind their back – a knot controlled in a mendaciously tight-fisted and ideologically driven Westminster. How we laughed at soviet communist dogma that made black into white and turned lies into truth! Now we have the neo-liberal belief that says austerity is good for us, for the economy and, sotto voce for oligarchs. A pernicious doctrine that has fallen into disrepute and must not be… Read more »

The Original Mark
The Original Mark
1 month ago
Reply to  Neil Anderson

Makes my blood boil every time I read how the UK is close to being bankrupt, The UK has a sovereign currency it can’t go bankrupt, unless it does something stupid like take on loads of foreign currency debt. My biggest fear is if Wales ever obtains independence, it joins the euro and is then controlled by the ECB, that would be jumping out of the frying pan and into the fire whilst carrying a few jerry cans of petrol, in my opinion.

Neil Anderson
Neil Anderson
1 month ago

Indeed, it would be most unwise to join the Euro anytime soon. Like the EC, it and the ECB needs extensive reform. The single market and the customs union should warrant a prompt review however. It is bodies like NATO and the nuclear club that would seriously undermine our long-denied sovereignty and must be resisted at all costs.

John Davies
John Davies
1 month ago

If Plaid Cymru are advocating raising income tax then they should be honest and say so. Vague generalisations such as “leaving no stone unturned” and “exploring tax raising powers” adds nothing to the debate.

Riki
Riki
1 month ago

Which will alienate People to the Senedd! But of course here in Wales we have no choice as Wales lack the borrowing powers England and Scotland have. We are damned if we do, damned if we don’t. You have to be fair, how England have set it all up so it’s those in Welsh Government that will take the brunt of criticism despite having one hand tied behind their back is a stroke of genius.

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