The Chancellor of the Exchequer, George Osborne has set out the next stage of his long term economic plan for Wales, with an ambitious Budget designed to make Britain fit for the future at a time of increasing global economic uncertainty.
The 2016 Budget showed how the Government’s economic plan continues to work for the people of Wales. The employment rate in Wales is at a record high. It grew by 3.7% in the last year, faster than any other UK region, with 51,000 more people in jobs. Unemployment has fallen by over 35% since 2010.
The government is taking forward the St David’s Day agreement for Wales and is committed to delivering the Welsh Rates of Income Tax, alongside devolution of further powers, including on energy and transport. A funding floor for the Welsh Government was announced at the Spending Review.
Wales will also benefit from major investments in city deals and announcements to support business and families set out in the Budget including:
- The income tax personal allowance will be £11,000 from April this year, and increase to £11,500 in 2017-18. The income tax higher rate threshold will be £43,000 this year and rise to £45,000 in 2017-18, a £2000 increase. These changes mean that by 2017-18, 1.4m individuals in Wales will gain by £182 and a total of 61,000 individuals will have been removed from income tax altogether, compared to 2015-16. 25,000 individuals will no longer pay the higher rate of income tax compared to 2015-16.
- To reduce costs for businesses and hardworking families in Wales the government will reduce tolls on the Severn River Crossings by 50%, once the Crossings are in public ownership and subject to public consultation.
- Alongside this, the government will review the case for free flowing tolls on the Crossings.
- A £1.2 billion deal for the Cardiff Capital Region which has been agreed with the Welsh Government and local partners. The UK government’s £500 million contribution to the deal will provide an investment fund for the region and support electrification of the Valley Lines railways, a central part of the ambitious Metro project.
- The government will open discussions with the Welsh Government and local partners on a potential City Deal for Swansea Bay City Region and will open the door to a growth deal for north Wales to strengthen the region’s economy and make the most of its connection to the Northern Powerhouse.
- £500,000 is being provided to CAIS Wales, Change Step Veteran Services, which works across Wales. This commitment will deliver a new referral pathway for 800 veterans across Wales, providing them with tailored peer support and specialist intervention.
- £497,000 is being provided for Action for Children Swansea’s SAIL project to support young mothers and mothers to be. This is being funded from the Tampon Tax Fund.
- The government will also provide funding for the Lloyd George Museum in north Wales in order to help commemorate the centenary of his time as Prime Minister.
- A science and innovation audit, benefitting South East Wales and South West England, to map the area’s research strengths and identify areas of potential global competitive advantage.
The Chancellor of the Exchequer, George Osborne said:
If Britain is to be fit for the future, we need to give our great nations real incentives to grow the private sector, and reap the rewards when they do.
So my Budget today puts the next generation in Wales first. We are delivering a tax cut for 1.4 million people in Wales thanks to an increase in the Income Tax personal allowance and the higher rate threshold, and a tax cut for 25,000 Welsh businesses thanks to a reduction in Corporation Tax to 17% in 2020-21.
We have also announced a ground-breaking £1.2bn City deal for Cardiff, a halving of the tolls on the Severn River Crossings, and that we will open discussions with Swansea and North Wales on deals in those areas.
This is a Budget that delivers on our plan for working people in Wales and sets out the next steps in building a stronger Welsh economy.
The Secretary of State for Wales, Stephen Crabb, said:
Today’s budget shows the scale of ambition this Government has for Wales.
Deals for growth in the north and south, massive support for business and a fresh look at science and innovation heralds a wave of optimism for all of Wales.
Despite global challenges, in Wales we have record levels of employment and I am confident that Wales can weather any storms ahead.
This is a budget for the next generation that will be felt in all corners of Wales.
On the North Wales Growth Deal, Secretary of State for Wales Stephen Crabb said:
The Government’s programme of City Deals and Growth Deals has helped local areas to thrive through innovative partnerships between central government and local decision makers.
A growth deal would ensure that North Wales has the tools it needs to bring long term prosperity to the region and reap the maximum benefits from the Northern Powerhouse.
On the £500K allocated to Cais, Secretary of State for Wales said:
We owe a huge debt to Welsh veterans, who made great sacrifices to keep our country safe.
Over 800 veterans in Wales will benefit from the £500,000 given to Cais to provide them with the quality support they deserve.
The volunteers at Cais provide people across Wales with first class support and I hope today’s announcement strengthens this vital service.
On the Severn Bridge tolls, Wales Office Minister Alun Cairns said:
The Severn Crossings are a crucial gateway to Wales – a familiar route for motorists travelling in and out of Wales to do business, visit our tourist destinations or simply travel to see their families.
Today’s commitment from the UK Government to reduce the tolls by 50% demonstrates that Wales is open for business and will only strengthen the economic links with the south-west of England.
On the £27K allocated to the David Lloyd George Museum, Wales Office Minister Lord Bourne said:
Our museums provide a unique opportunity for people to learn about how our rich and proud history has helped to shape Wales in the 21st Century.
Tourism and hospitality play an important role in delivering economic growth for the UK and Wales. Visitors from all over the globe travel to Wales to see the world-class art and historical artefacts on display and I’m delighted to see these important destinations benefiting from the Chancellor’s announcement today.
I am delighted that Lloyd George Museum will soon receive £27,000 a year to help protect this valuable, educational resource for future generations. Set in the heart of North Wales, this cultural gem provides people from across Wales & around the world an invigorating insight into our rich and varied history. It is an especially welcome announcement in the centenary year of him becoming Prime Minister.