John Clark’s speech from the Welsh Reform UK conference in Port Talbot – 4th February 2024
When Caroline invited me to talk, I asked if I could speak about something that’s frustrated me for most of my adult life, and that is the Welsh economy. More specifically, I’d like to discuss some of the ways Reform UK can help.
Recently I came across a report by Aberystwyth University, detailing attitudes of Young People in Rural Wales. It contained many insights, but one of the most depressing facts to come out of the survey was, 81% of young people in rural Wales think that they will need to move away from their local area. That’s 81%..
Meanwhile, our Wales Centre for Public Policy, and the Migration Advisory Committee recommend attracting inward migrants to stem population shortages. Our government offers visas, free health care, benefits and for some free 4*hotel accommodation.
How can it be right that young people in Wales are moving away for better prospects, whilst we invest money to encourage inward migration?
So how bad is the Welsh economy? What’s driving our young people away?
- Well, pay for people working in Wales is over 6% lower, than the national average.
- Over 16% of the Welsh population are in so much debt, they are unlikely to ever pay it back, of which about half, have a total household income of less than £20,000.
- Unemployment in Wales is 4.6%, compared with the national average of 3.9%.
So by most objective measures, sadly, Wales’s economy does indeed lag behind the other Home Nations.
The good news is:- Reform UK’s economic policies are progressive, and promise to reduce inequalities of wealth. This means Wales stands to benefit most from a Reform UK government.
For a start, we will lift the income tax threshold to £20,000. This will help every worker who earns over £12,570, with workers earning £20,000 and above standing to save £1,486 per year on their tax bill. This policy alone will have a profound effect on Welsh employment:
- It will mean that lower-income jobs are more attractive, compared to living on benefits.
- It will boost personal savings and investment.
- It will allow local people to spend more, which will further help the economy.
- And it will make, having children more affordable.
But there is more good news. We are not going to just stop at income tax.
- We will also scrap V.A.T. on energy bills, which could save an average household £100 per year.
- We will scrap environmental levies, which could save households up to £160 per year.
- We will lower fuel duty by 20p per litre, which means the average driver saves £240 per year.
- And, we will lower V.A.T. from 20% to 18%, which will save the average household £300 per year.
When you combine our changes to income tax with our other tax reductions:
- Workers earning £15,000 will enjoy savings of around £1,300 per year
- Workers earning £20,000 and over will enjoy savings of almost £2,300 per year
Now whilst these savings will help workers all over Britain, they will be especially beneficial to Welsh workers. A £2,300 income boost will be more important to someone earning £20,000 in Wales, than it would be to someone earning £50,000 in London.
But helping workers hold onto more of their pay isn’t all that Reform UK has to offer the Welsh economy. We also promise to allow Small to Medium-sized enterprises to hold onto more of their profits.
To achieve that goal we will introduce a £100,000 corporation tax threshold.
Currently, a company that enjoys £100,000 in profit is liable for £22,750 corporation tax. Under Reform UK’s proposals, a company earning £100,000 in profit will be liable for zero corporation tax.
As Welsh companies typically enjoy less profit than the national average, our corporation tax threshold will benefit Welsh businesses as much or more than anywhere else.
Small to medium-sized enterprises will keep more of their money, which means:
- Businesses can be more competitive, whilst still maintaining a profit.
- Businesses will be able to invest more – employ more people, train their staff, improve their production and explore new profit centres.
- And, as businesses become more successful they will grow, which, over time, will lead to more tax revenue.
We will make work pay
- the ultimate goal of business, or any worker is “to make money”
- Success in business takes commitment and sacrifice.
Reform UK’s policies reward economic participation.
In Wales, we have 3 electoral challenges to overcome:
- We need success in the general election, to return MPs to Westminster.
- We need success in the Welsh election, to restore sanity to the Senedd.
- And, we need to protect the Union, by proving that Great Britain works for Wales.
Taking votes off of the Tories alone will not give us the success we need in Wales. Here, we also need to take votes off of Labour and Plaid Cymru. I believe telling everyone about our economic policies will be one of the strongest arguments, that will persuade their supporters to switch, and vote for us.
Only by making work pay, can we restore the Welsh economy.
And only by restoring the economy can we convince Welsh youngsters, that they can stay, to pursue their careers in Wales.
Sources
Corporation Tax calculator
https://www.tax.service.gov.uk/marginal-relief-calculator/results-page
Average UK household energy bill
https://www.edfenergy.com/energywise/what-is-the-average-energy-bill-in-the-uk
Average environmental taxes paid by households in the UK decreased to £575 per household in 2020.
https://www.ons.gov.uk/economy/environmentalaccounts/bulletins/ukenvironmentaltaxes/2022
The Welsh economy is performing worst out of every British region. Our economy contracted by 2% in 2022, while growth in England and Northern Ireland was flat at 0.0%.
https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpukregionsandcountries/julytoseptember2022
Median gross annual earnings for full-time adults working in Wales were £32,371
https://www.gov.wales/annual-survey-hours-and-earnings-2023
households earning less than £20,000 a year account for around half of the total
https://www.wcpp.org.uk/publication/indebtedness-low-income-and-financial-exclusion-in-wales/
Median weekly pay for full-time employees in the UK was £682 at April 2023. After adjusting for inflation (to obtain figures “in real terms”), this is 8% lower than in 2008.
Median weekly pay for full-time employees in Wales at April 2023 is £636 (7.2% behind national average)
https://commonslibrary.parliament.uk/research-briefings/cbp-8456/
Unemployment across UK = 3.9%
Unemployment in Wales = 4.6%
https://www.gov.wales/labour-market-overview-may-2023
Gross value added per head in Wales — a measure of how much money is generated through goods produced and services delivered — is 74 per cent of the UK average.
https://www.ft.com/content/66f7a8a4-c179-49a7-b7cc-0d984f7df9e4
81% of young Welsh people think that they will need to move away from their local area for
education, training or work
https://pure.aber.ac.uk/ws/portalfiles/portal/62171190/Rural_Wales_Youth_Survey_Report.pdf
The Wales Centre for Public Policy recommends attracting inward migrants, especially young and skilled workers
https://www.wcpp.org.uk/news-and-media/news-article/policies-needed-to-soften-impact-of-population-decline/