Wales will lose out as a result of the UK budget statement yesterday (21 March), according to Plaid Cymru and the Welsh Labour Party.
Plaid slammed the UK government’s support for the “mega-rich” and said this was another reason for Wales to be given greater financial autonomy. The devolved Welsh government, which is currently Labour, contrasted their own priorities with those of ministers in London.
Plaid Cymru are particularly angry about the reduction in the top rate of income tax from 50p to 45p, despite plans for a further £10 billion cuts to the welfare budget. The top rate of tax applies only to people whose income is higher than £150,000 per year – about one per cent of the UK adult population.
Plaid MP Jonathan Edwards said that “progressive taxation is a principle, not an option, and those who are most able to afford must make a fair contribution”.
Edwards said that if the 50p tax rate was not raising as much as it should have done, it was because of “tax dodges” by the wealthy. He called for a crack down on tax avoidance.
Meanwhile, Plaid’s new leader Leanne Wood attacked the UK government’s plans for regional pay variations for public sector workers. They are likely to see lower pay in Wales, as well as Scotland, Northern Ireland and parts of England.
Wood raised the issue in First Minister’s Questions in the Welsh Assembly, when she asked her first question as Plaid leader.
“If public sector workers in Wales are effectively given a big pay cut, what will that mean for our economy?” she asked. “People will have less money in their pockets and more of our young people will need to move away to find work.”
Wood, who became Plaid Cymru leader last week, ran for the post on a firmly socialist and environmental platform.
Labour First Minister Carwyn Jones declined her request for an urgent meeting of Welsh party leaders to agree a united opposition to regional pay. But speaking after the budget, Labour Shadow Welsh Secretary Peter Hain echoed several of Plaid’s concerns.
He described the budget as “bad news for Wales”. He said it was based on “wrong choices, wrong priorities, wrong values” from the “out-of-touch, same old Tories”.
Kirsty Williams, leader of the Welsh Liberal Democrats, leapt to the budget’s defence, citing the increase in the threshold above which people start paying income tax. She said it would reduce the tax burden for workers on low and middle incomes.
"This Budget has the Lib Dems stamped all over it,” said Jenny Willott, Liberal Democrat MP for Cardiff Central. “It shows the government's dedication to helping struggling families and proves that the Lib Dems are making a real difference in government”.