Ahead of the Senedd election on May 7, parties are making promises about what they plan to do if they get voted into power. Manifestos have been published that make pledges about a range of topics, from health and education to councils,
In a series of pieces ahead of the election, we’re going to break down what each party says about key areas. First up? Taxes.
Devolved taxes now account for around 21% of the Welsh Government’s budget for day-to-day (resource) spending. Business rates, council tax, land transaction tax and landfill disposals tax are all devolved to Wales, and the Welsh Government has the power to vary income tax rates but not the bands. meaning the Welsh Government can increase or reduce revenue, but has less powers than in Scotland, where powers over tax bands are devolved too.
In their manifestos, there is some crossover. Council tax reform is mentioned in some way by all parties.
Reform UK and Conservatives both pledge to cut income tax, while the Lib Dem leader Jane Dodds said she would consider raising it to increase funding for social care.
A vacant land tax was also touted by parties, to encourage development.
You can watch the debate we hosted with all six main parties in full on our YouTube channel, and read their tax pledges below:
Conservatives
The Conservatives pledge to:
- Cut the basic rate of income tax by 1p
- Scrap Land Transaction Tax (the Welsh equivalent of stamp duty)
- Cap council tax increases at 5% and require local referendums for larger rises
Green Party
- Scrap council tax, replacing it with a land value tax meaning richer people pay more
- Business Rates will also be replaced with a land value-based system so that small businesses pay less
- Introduce a Vacant Land Tax
- At a UK level, press for a “polluter pays tax” targeting the largest contributors to environmental damage, including high-emitting industries and the most polluting luxury activities.
When we asked Anthony Slaughter, the party leader in Wales, about income tax, he said:” We believe Wales should have the same powers of tax as Scotland does, then we could create a fairer tax system, but at the moment we wouldn’t raise income tax now.”
Labour
- Introduce a vacant land tax to prevent land-banking and encourage development.
- Commit not to raise Welsh rates of income tax over the next Senedd term. We will carefully explore the case for expanding Wales’ income tax powers. When we asked Eluned Morgan in our debate, she replied: “We wouldn’t raise income tax, but we’ve always been arguing for flexibility in terms of banding.”
- Make council tax fairer
Lib Dems
- “For an emergency period, raise the Welsh rate of Income Tax (WRIT) by 1p in the pound to fund urgent investment in our social care system.”
- Regularly reviewing business rate relief thresholds across all sectors to reflect inflation, sectoral needs, and changing economic conditions, whilst developing a long-term reform plan for business taxation in Wales
On income tax, leader Jane Dodds told the WalesOnline leaders’ debate income tax rises could feature. “We’ve got to pay for our public services and we’re going to be honest with people. We want to see if there’s no other way for paying for social care one penny on income tax.”
Plaid Cymru
- Ask UK Government for greater tax powers including the ability to set income tax bands and to introduce a Vacant Land Tax
- “Make council tax fairer”
- Look at reforming Land Transaction Tax to better support first-time buyers
- “Reform and rebalance” business rates
When we asked leader Rhun ap Iorwerth about income tax plans, he replied: “The idea of cutting income tax now given the tightness of the public finances isn’t realistic.
“I would though love to bring down tax for the people who are struggling most. We won’t put taxes up now but we do absolutely need to have the full suite of tools that we can devise a tax system that works for Wales“.
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Reform UK
- Cut 1p off all rates of Welsh income tax by the end of the next Senedd term
- Introduce a “tax lock”: Reform will not introduce any new Welsh controlled tax or levy, it says
- Where councils propose council tax increases above 4.99%, residents will have the right to approve or reject them through a local referendum in line with England.
