Mini-budget: Keeping 45p tax rate in Wales 'would raise £45m'

Rebecca Evans says if the Welsh government could, it would keep the higher rate of income tax

Keeping the 45p rate of income tax in Wales would raise about £45m, according to Wales' finance minister.

Rebecca Evans said the Welsh government would keep the highest rate of income tax for those earning over £150,000 if it was able to.

It comes after Chancellor Kwasi Kwarteng said it would be scrapped.

It is not clear whether the tax cut would also apply in Wales, where Ms Evans said about 9,000 people would be set to benefit.

Since 2019, the Welsh governments has had some income tax powers, allowing ministers to adjust the tax by 10p in every £1 for each band.

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But Welsh ministers do not have powers over the income levels at which people pay different rates of the tax.

Speaking on the BBC Politics Wales programme, Ms Evans said: "We're trying to get to the bottom of this because our understanding is that now it's been abolished across the border it also, naturally, becomes abolished here in Wales.

"But part of it depends on how the UK government goes about bringing that into effect, in terms of what the legislation precisely says."

She added: "So, we will be looking into this much further, some discussions with UK government in terms of what their plans are."

Chancellor Kwasi Kwarteng cut the highest rate of income tax in his mini-budget

Asked, if it could, would the Welsh government keep the 45p rate, Ms Evans replied: "We would keep it here in Wales.

"It affects around 9,000 people who benefit by about £45m as a result of that [cut].

"Imagine what we could do with £45m, targeted to where it is needed."

Plaid Cymru has urged the minister not to follow UK ministers in cutting the basic rate from 20p to 19p from next April.

But Rebecca Evans said an independent forecast of the financial outlook is needed before making any decisions on the lowest rate of income tax.

She told Politics Wales: "It is a big question and a really serious one, which is why we are not going to be pushed into making early decisions on that."

Public sector pay

The finance minister would not be drawn on whether extra Welsh government cash would be made available to improve public sector pay.

Rebecca Evans called on the UK government to "provide additional funding for public services".

But she wouldn't say whether the Welsh government would make extra cash available without more Treasury money.

Nurses, NHS staff and teachers in Wales are all threatening to go on strike following below-inflation pay awards.

On Thursday, the Royal College of Nursing will start balloting its members on industrial action.

Welsh NHS staff are set to be balloted by Unite the union on industrial action and the teaching union NASUWT is threatening to ask its members about strike action unless teachers receive at least a 12% pay rise.

Despite offering below-inflation pay awards, First Minister Mark Drakeford has said public sector workers should receive pay rises that "at least match inflation" and understood "the anger that is felt by people at the frontline".

Ms Evans said: "Alongside my counterparts in Scotland and Northern Ireland we have made a request now for an urgent meeting with the chancellor to discuss a range of issues, including public sector pay, recognising that people in the public sector have worked extremely hard over the pandemic."

Asked if the Welsh government could find extra cash for higher pay awards if no more was made available by the UK government, the minister said there were "limitations".

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She added: "Fifty per cent of the Welsh government's budget is exposed to pay in one way or another, so that means for a 1% increase in public sector pay we would have to find an additional £100m - these are very large sums of money that we're talking about.

"I don't want to talk about individual pay negotiations, some of those are ongoing, some are considering balloting their members and so on, so it's a really sensitive time for those discussions.

"But I think the overall point is that the UK government really does need to provide additional funding for public services, particularly because we know that our budget now is worth £4bn less [because of inflation] than it was at the time we set that three-year spending period."