‘Chancellor expecting lowest paid to pay the highest price’ – Evans
WELSH Finance Minister Rebecca Evans has accused Chancellor Rishi Sunak of expecting the lowest paid to pay the highest price for the pandemic.
Responding to his decision in the UK Budget not to increase tax allowances, Ms Evans said: “Essentially that’s a tax increase by stealth.
“The most concerning thing about that is that it will hurt the lowest paid people the worst. There’s absolutely nothing progressive about what the Chancellor has announced today.
“The highest earners will see little or no impact, so this is very much a case of the lowest paid being asked to pay the highest price for the pandemic, which is something we clearly can’t support.”
Her comments came as Ms Evans revealed as the business rates holiday for the retail, leisure and hospitality sectors in Wales will be extended for a further 12 months.
The £380m package provides retail,leisure and hospitality businesses with rateable values up to £500,000, and charities in Wales with a year-long rates holiday – going beyond what has been announced in England.
This relief package, said the Welsh Government, in combination with the existing Small Business Rates Relief scheme, would ensure that more than 70,000 businesses will continue to pay no rates at all in 2021-22.
Asked about Mr Sunak’s to increase corporation tax at a later date, Ms Evans said: “We think everybody should pay their fair share, and that’s why we’ve sought to make decisions within our own financial support schemes for businesses, to ensure that businesses based in tax havens, for example, are not able to access any of our Covid-related support for business.
“We are welcoming part of the UK Budget announcement, although we do need to understand the full detail behind it, which is the tax reduction for businesses that are bringing forward plans to invest in this financial year.”
“It’s good to see that the Chancellor has responded to some of the things which we were calling for, for example an extension to the furlough scheme [until September] and the continued support for self-employed individuals.
“However, it’s disappointing that he’s already determined when these schemes will come to an end. Our view is that they should stay in place until the economy’s in such a place that it would be the right time to end these particular schemes.
“And when they are ended, of course, they should be tapered and not come to an abrupt end.”
Ms Evans said that overall, as a result of the UK Budget, the Welsh Government
had an additional £735m in revenue funding next year. But she said: “Of course even taken with the settlement that we had at [last autumn’s] Spending Review, our funding for the next financial year is still 4% lower [in real terms] than it was in 2010-11 per person.
“So that clearly shows the long shadow of austerity here in Wales.
“Particularly disappointing to us was the lack of a single penny in additional capital funding.
“Given that our budget for capital next year is £131m than it was last year, we were really hoping that there might be some good news for us on that.
“Capital funding is the kind of money we need to use to build roads, houses and schools. It’s that kind of money that will allow us to move through recovery with structural investment.”
Asked whether she thought the UK Government was starving the Welsh Government of capital funds because, under the terms of the Internal Market Act, it intends to spend money on infrastructure projects in Wales itself, thus undermining the devolution settlement, Ms Evans said: “It’s really concerning that they’ve sought to use the Internal Market Act to circumvent devolution and to circumvent the vWelsh Government in terms of infrastructure spending in Wales.
“Clearly this is something we were assured wouldn’t happen because of the Internal Market Act. But just a number of weeks later, we’re starting to see the impact of it. It’s a concern – and for a number of reasons, one being that we could just lack coherence. If you’ve got two governments looking to make infrastructure investments, you need to ensure that there is some kind of strategic and joined-up approach to that.
“The UK Government announced today some kind of funding to allow communities to use to purchase assets.
“Actually we’ve announced a scheme of our own in the [Welsh] Budget. We don’t know yet whether the UK Government scheme is a UK-wide one, but if it is, how do we make sure that those two schemes complement each other?
“To do that we just need to have improved relationships, I think, with
the UK Government – and better sharing of information to allow us to make these things work.”
Asked how much of the £735m extra money from the UK Government
would be used for business support – there had been criticism from Plaid Cymru that the £200m Ms Evans said: “The UK Government has announced tin the Budget hat it’s providing three months rate relief for leisure, hospitality, retail and tourism businesses – that’s full relief for three months, with 66% relief for the remainder of the year.
“We don’t think that goes far enough, so in Wales we’ll be offering a full 12 months rate relief for businesses in those sectors, up to a rateable value of £500,000. So essentially all but the very largest supermarkets will be able to have this full relief for the full 12 months.
“I’m really pleased that we’ve been able to extend that here in Wales, and offer a better package than they have access to across the border.
“We’re looking at the moment to see what more we can do to help businesses.
“Today there’s been the announcement of a £30m boost for the sector specific support fund, and we’re also looking as to whether there will be additional funding required should we be in a position at the March 12 review to still be requiring some level of restrictions.
“If that is the case, there will be additional funding in-year, so that doesn’t come from the £200m we’ve set aside for the next financial year.”
Contrasting the UK Government’s approach to the economy with that of the Welsh Government, whose final Budget for 2021-22 she announced on Tuesday, Ms Evans said: “I would hope that people in Wales feel the Welsh Government has been able to give them some confidence for the period ahead.
“The additional funding we announced for local government and for the NHS will allow those absolutely vital services to continue their effort to support individuals and communities through the pandemic. I think having that kind of confidence that those services will be there for you when you need them is of some great comfort to people in these very unpredictable times.
“I think the sheer focus we’ve been putting in Wales on small and medium-sized businesses is really coming to the fore now, especially with our additional announcement today on rate relief for 12 months for those businesses.
“Also the priority we put on supporting people who need it most is very clear. So you’ll see examples in our Budget of the discretionary assistance fund, with a big hike in the funding there, a real focus on supporting people into employment, into ‘catch-up’ for students and young people who are struggling as a result of what they’ve missed in school or college.
“Compare that really to the decision the UK Government has made on the personal limit for income tax. It just shows where our priorities lie and that we understand in Wales the struggles that ordinary people face, in a way I don’t think the Chancellor can or does.”
Earlier, Ms Evans had said she was “disappointed” there was no mention of funds to ensure the safety of 2,000 coal tips in Wales following a 60,000tonne landslide last year at one in Tylorstown, Rhondda.