By Daniel Hunter
The Chancellor of the Exchequer’s Budget will pave the way for a sustainable economic recovery and support the aspirations of the people and businesses of Wales, said the Secretary of State for Wales, David Jones.
Mr Jones said the Chancellor’s announcements will support the people of Wales who aspire to work hard and get on, assist Welsh businesses which want to grow and help people get their foot onto the property ladder.
As a result of the measures announced today, the Welsh Government will benefit from an additional £161million of capital spending power. This will bring the total amount of additional capital spending power granted to the Welsh Government over the spending review period to more than £858 million.
The Government will also introduce an allowance of £2,000 per year for all businesses and charities to be offset against their employer National Insurance Contributions from 2014. This measure will benefit 35,000 businesses in Wales by £50million, with 20,000 of these businesses taken out of National Insurance Contributions altogether.
The owners of the 1.8million motor vehicles in Wales will benefit from the cancellation of the planned fuel duty rise in September 2013, saving the average motorist £25 a year and hauliers £750 a year.
The increase in income tax personal allowance to £10,000 will benefit 1.1million tax payers in Wales, and lift 12,000 low income individuals out of income tax altogether. Taken together, the changes to personal allowance threshold since 2010 have lifted 130,000 people in Wales out of income tax altogether.
People looking to buy their first home in Wales will benefit from the Government’s ‘Help to Buy Mortgage Guarantee’, which will see the introduction of a government equity guarantee on 95% mortgages.
The Secretary of State for Wales is currently undertaking a series of business and education themed visits in Hanoi, as part of his trade and investment mission to Asia. Speaking from Hanoi, where he is today marking the UK’s accession to the Southeast Asian Ministers of Education Organisation (SEAMEO), he said:
“The measures announced by the Chancellor today are intended to stabilise the country’s finances, restore business confidence, and ensure private sector growth. They show that the UK Government is laying the foundations for economic growth by taking decisive action.
“I was pleased to see that the Welsh Government will receive an additional £161million of capital funding as a result of this Budget. It is now up to the First Minister and his team to set their own priorities and use this funding to invest in high-quality infrastructure, including any shovel-ready projects waiting for the financial backing to get off the ground.
“We remain committed to working with the Welsh Government and continuing our positive discussions on the funding options for improving the M4 in South Wales. These are being considered alongside the recommendations made in the Silk Commission’s report and we will respond in due course.
“I was also particularly pleased to see that the priorities of the members of my Business Advisory Group, to see an increase in capital funding for Wales, and the introduction of the National Insurance Contribution allowance were reflected in the Budget today.
“What this Budget shows is that this Government is determined to pave the way for a sustainable economic recovery. We are creating the conditions to help businesses in Wales to start, grow and develop, to help individuals care for their families and to support everyone’s aspirations for a more prosperous Wales.”
In other measures announced today, businesses in Wales will also benefit from today’s Budget with the announcement of a further 1% reduction in the main rate of corporation tax, bringing it to 20% by 2015.
The Chancellor also confirmed that he would be providing £750million a year to help support working families with their childcare costs. In Wales, 110,000 families with 170,000 children under 12 will be able to claim this support.
Wales’ 192,745 Small and Medium Sized businesses (SMEs) will benefits from measures to improve access to finance through the Business Bank and the Enterprise Finance Guarantee. The important aerospace sector in North Wales will also benefit from access to the £2.1billion Aerospace Technology Institute to support research and development in this sector.
Operators of over 21,000 HGVs and 10,000 buses and coaches in Wales will also benefit from the freeze in Vehicle Excise Duty in 2013-14.
Wales Office Minister, Stephen Crabb said:
“This budget statement sets out the actions of this Government to drive growth, while ensuring fairness for all.
“The decision to cancel the planned fuel duty rise in September will be welcomed across Wales. From April, the average price of a litre of petrol will be 13 pence per litre cheaper than it would have been if we had continued with the tax increases as set out by the previous government.
“We are continuing to prioritise business and growth by cutting the rate of corporation tax even further, and providing SMEs with improved access to finance. This will help to improve our competitiveness at home and abroad.
“What is clear is that this Government is not going to run away from our problems, we are going to overcome them. The Budget will stick the course and take the next steps to build a stronger economy.”
Wales Office Minister, Baroness Jenny Randerson said:
“From businesses to families, the Budget announcement will have a fair and positive impact in Wales.
“The introduction of tax-free childcare will be welcomed by the 110,000 families with 170,000 children under 12 in Wales. Too many families find paying for childcare tough and are often stopped from working the hours they’d like. Under this scheme, a typical family with two children could save up to £2,400 a year. This is a boost direct to the pockets of hard-working families in what will be one of the biggest measures ever introduced to help parents with childcare costs.
“The Help to Buy Mortgage Guarantee scheme will also provide significant support to those struggling to gather deposits to buy a home, but could afford to maintain a mortgage.
“This Budget shows that the coalition government is putting the conditions in place to support the people of Wales with the aim of supporting long-term economic growth UK-wide.”
The Office of National Statistics has also published the Labour Market Statistics today. The figures reveal that, while employment levels in Wales have decreased over the last quarter, the longer term outlook remains positive.
In line with the rest of the UK, unemployment levels increased in Wales over the last quarter. The employment level has decreased by 8,000 from the last quarter. However, compared to the same period last year, employment in Wales is up 7,000, youth unemployment is lower and economic inactivity is also lower.
In response to the figures, Secretary of State for Wales, David Jones said:
“While today’s employment figures are disappointing for Wales, they also highlight the need to strengthen the Welsh economy.
“Across the UK as a whole, we have seen employment levels increase by 131,000 over the last quarter alone. We want to see that momentum mirrored in Wales.
“The Welsh Government is responsible for economic development in Wales, but we want to work with them to seize every opportunity to attract investment and create jobs. It is this common goal that must be at the heart of our relationship in the months and years ahead.”