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Welsh Labour move towards higher taxes is “poison to Wales’ economy”

The Welsh Conservatives will use their Assembly debate today (Wednesday) to call on the Welsh Labour Government to abandon their flirtation with increasing income tax before the next election in 2021.

The Welsh Labour 2016 manifesto promised not to use the now-devolved portion of income tax within the Fifth Assembly.

However, in 2017, Labour started to say that it would carefully consider tax rates and their impact on other Welsh taxes to “ensure they continue to generate sufficient revenue to fund public health services while remaining fair and supporting economic growth”.

In October last year, then-Finance Minister Mark Drakeford said he “will not move away from our manifesto commitment unless I'm compelled to do so, but I don't rule out the possibility that circumstances could change in a way that do have that compelling impact.”

All of this comes despite the Welsh Government admitting that the most it would be able to get out of income tax would be to charge basic rate payers, and the CBI saying that “raising Welsh income tax should be a last resort, not a first response”.

The Scottish Conservatives found that following the Scottish Government’s decision to use their levers to increase income tax, a £550m black hole emerged in the country’s finances as thousands of higher and additional rate taxpayers left.

The Welsh Conservatives will be voting for one of Plaid Cymru’s amendments which stresses the need to support indigenous businesses.

Welsh Conservative and Shadow Finance Minister Nick Ramsay AM will make the case that the best way to grow tax revenue is the recognition of the vital importance of attracting people, businesses, and investment to Wales, not taxing them further.

Commenting ahead of the debate, the Monmouth AM said:

“High taxation punishes the population through taking more hard-earned money from the pockets of this country’s workers and stifling the innovation of business – poisoning our economy.

“So why does Welsh Labour not comprehensively rule out income tax rises? We believe it is because their compulsion to levy will be irresistible.

“However, we would happily be proven wrong and call on the Welsh Labour-led Government and their backbenchers to vote for our motion which simply binds them to their manifesto promise and end this threat to the prosperity of Welsh taxpayers.”