Plaid Cymru suggests tax rise

The Welsh nationalists calling for a tax rise is significant in Welsh politics because while Welsh Labour governs Wales, it has a cooperation agreement with Plaid to ensure it has enough votes to pass legislation.

Price made the call during First Minster’s Questions in the Senedd (Welsh Parliament). He began by noting that, only a few weeks ago, at the UK Labour conference, a motion from Unison was passed calling for inflation-proof pay rises. Price asked First Minister Mark Drakeford (Lab) if it is his Welsh Government’s policy that public service workers should be entitled to pay settlements that at least keep pace with inflation.

Drakeford said that every one per cent rise in the pay bill across the public service in Wales costs another £100 million – and asked Price ‘where that money is to be found?’ The UK Government has said that it will not increase funding for public services, he continued, and inflation means the Welsh budget is worth over £1 billion less than it was when it was set in November last year.

Price responded that the Senedd should ‘take matters into our own hands’: “you said you were committed to using all the powers that you had to defend the people of Wales from this Tory onslaught. Well, use all the powers that you have. We have the ability to use our tax powers to keep the 20 pence basic rate of tax in Wales and to be more progressive by putting a penny on the higher and additional rate. We argued for those powers, we campaigned for them, for situations precisely like this. Doing as we propose would raise close to £250 million and go some way, at least, to tackling the crisis in pay and morale in our public services, as well as in the wider crisis of liveability.”

Drakeford replied: “Both I and the Finance Minister have said that we will make decisions on the fiscal powers available to the Welsh Government in the way that we always do them, as part of the budget-setting process, when we have the full information we need in order to be able to do so.”

Tourism tax

In a separate exchange, the Welsh Conservatives’ Shadow Minister for Culture, Tourism & Sport, Tom Giffard, criticized both Drakeford and Price for launching a tourism tax consultation with members of the industry present, but leaving before taking any questions. Giffard said these tourism industry professionals are worried about the huge impact of a tourism tax on their businesses and their communities.

Drakeford said the real problem that the tourism industry in Wales faced over this summer, was that it was unable to recruit the staff it needed, which he blamed on Brexit. He said: “We had an ample opportunity to set out for the audience there the reasons why we will introduce a visitor levy: because it will raise money to invest in the tourism industry, and to make sure that the conditions that make Wales an attractive place to visit today will go on being attractive places into the future. A small contribution to that from visitors who come to enjoy those parts of Wales is both a fair thing to do, but also a very effective way of making sure that we can support and sustain the tourism industry into the future.” He said over 500 responses have been received to the consultation so far.

The full session is here.

By Hamant Verma, CIOT External Relations Officer