Writing today on the Gwydir blog site (https://gwydir.blog/2020/07/31/intelligent-spending-needs-intelligent-taxation/), the Welsh Conservative Shadow Finance Minister in the Welsh Parliament offers an insight into some of the principles which will underpin Welsh Conservative tax policy entering into the next Welsh Parliament election in May 2021.
In a wide ranging and often philosophical article, Nick Ramsay MS argues:
“It is not why we tax but how we tax that matters. Taxation can also of course be used as a dissuasive measure. But for us as Welsh Conservatives, we need to think creatively about how we use taxation to incentivise behaviour too.”
Re-affirming the Welsh Conservative policy of no new taxes – and reducing taxes where possible - in Wales under a Welsh Conservative Government, he indicates that each of the existing taxes controlled on a Wales-wide basis could well be reformed:
- Business Rates are currently a flat tax on business, shaped little by the wider economic circumstances or the investments businesses are making in their staff and their workplaces and their local economies. Thought will be given to reforming these taxes so that they directly contribute to a better business environment to help with economic recovery post Covid, especially with protecting and creating jobs.
- Land Transaction Tax could be reshaped to take into account a green agenda so that it rewards properties with environmental and energy efficiency.
- Landfill Tax will be examined to see how it might be improved.
While specifically ruling out making detailed tax announcements this far ahead of the election, the Shadow Finance Minister reiterated the ambition of a Welsh Conservative Government to cut income tax during the life of the next Welsh Parliament, writing:
“Our long term aim will be to reduce income tax when it is prudent to do so. But our ambition is way bigger than just a soundbite about cutting a penny or two off income tax, it encompasses our whole range of policy levers.”
Nick Ramsay MS also unveiled a policy commitment to adopt a formal legislative approach for taxation in Wales:
“We will introduce an annual Finance Bill in exactly the same way that the UK Government introduces a Finance Bill after every budget. This will allow greater scrutiny and greater input into our taxation plans and will mark a new maturing in the fiscal competence of the institution. Where Labour has pontificated about doing this, just like so many times before it will be the Welsh Conservatives who deliver financial accountability to Wales.”
Nick Ramsay also stressed that the Welsh Government budget, which had ordinarily increased by a third since 2016, had received a further £4 billion from the UK Government to deal with the economic and public health crises caused by Covid-19, adding:
“Although there are of course very good reasons this has happened, we should not lose sight of the fact that for different reasons 2020-21 sees the biggest single increase in funding for the Welsh Government ever.”