Budget Resolutions - Income Tax (Charge)

Part of the debate – in the House of Commons at 3:47 pm on 1st November 2018.

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Photo of Hywel Williams Hywel Williams Shadow PC Spokesperson (Work and Pensions), Shadow PC Spokesperson (Brexit), Shadow PC Spokesperson (Cabinet Office), Shadow PC Spokesperson (International Trade) 3:47 pm, 1st November 2018

Caroline Lucas has already pointed out that the environment rated no mention at all from the Chancellor. I would add that, as ever, Wales remains an afterthought, and it was hardly mentioned in the Budget. Our planned transformative and green infrastructure projects—rail electrification, opening old lines, and tidal power generation—have all been swept away, while the entire Welsh Government roads budget has been blown on a 12-mile stretch of motorway through the precious Gwent levels. The word “austerity” may have been scratched out of the Prime Minister’s dictionary, but the people of Wales will be feeling its impact for years to come, and over everything looms the cloud of Brexit.

The figures are hugely worrying. In 2016, gross value added per head in Wales was 72.7% of the UK figure—in fact, the lowest figure in the UK—and between 2014 and 2017 the proportion of people on relative low income was highest in Wales, at 20%, while the lowest figure was in the south-east of England, at 12%. Above all, the fact that over a third of our children in Wales are living in poverty is a continuing national disgrace. The gross disposable household income per head in Wales was £15,835 in 2016, which was 81.5% of the UK average. Between 1999 and 2016, Wales had the third lowest percentage increase in gross disposable household income per head of all the UK countries and regions—in other words, we are falling behind.

Universal credit is only partly in force in Wales, at 11% of potential claimants. I note, however, that it has not been rolled out in the most intensely Welsh-speaking areas, such as my own. In fact, the wonderful universal credit system just cannot cope with treating our two languages equally. According to Community Housing Cymru, tenants on the new system now owe more than £2 million in unpaid rents, even though a quarter of those now in arrears were managing to keep up with their rents before they were transferred to universal credit. Changes to personal allowances have already been discussed. The Welsh economy is badly skewed towards the low-wage sector, so the Chancellor’s kindly treatment of higher rate tax payers will have a more limited effect on incomes in Wales, and will potentially have a huge effect on the Welsh Government’s new tax-raising powers. Given the gross national and regional disparities and inequalities in Wales and the UK there is much uncertainty ahead, and we can expect little from this Budget and this Government.