Plaid Cymru calls for income tax rises for NHS pay

People in Wales should pay more in income tax in order to help Wales through an "unprecedented crisis", according to Plaid Cymru.

The party is calling for a 1p in the pound increase for people earning over £12,500, a 2p rise for salaries of over £50,000, and an extra 3p for those bringing in more than £150,000.

It says the extra cash can go on NHS and social care pay.

But the Welsh government has rejected the idea.

It said raising the basic rate of tax would hit "many who are already struggling with rising inflation".

Meanwhile the Conservatives said Plaid could "stop propping" up the Welsh government if they really lacked faith in Labour ministers.

Plaid Cymru is calling for the income tax rises and cost-of-living measures to be added to the Welsh government's budget for the next financial year, 2023-2024.

The party proposes using the extra cash raised to fund an 8% increase next year for NHS staff and paying social care workers £12 an hour.

But if the proposals are rejected then Plaid will not vote against the draft budget when it is debated in the Senedd on Tuesday.

Their abstention - part of the party's co-operation agreement with the Labour Welsh government - will allow the budget to pass.

• Major tax rises for high earners backed by Plaid
• What is income tax and how much will I pay?

In December, the Welsh government unveiled its £20bn budget, which will see an increase in NHS funding but no income tax rises.

The Welsh government has had some income tax powers since 2019, but has never used them.

Ministers can adjust the basic rate, higher rate and additional rate by 10p in every £1, but do not have powers over the thresholds at which people pay the different rates.

• Personal allowance on earnings up to £12,570 - 0p
• Basic rate: £12,571 to £50,270 - 20p
• Higher rate: £50,271 - £150,000 - 40p
• Additional rate: £150,000+ - 45p

Plaid Cymru is calling for a 1p rise in the basic rate, a 2p increase in the higher rate, and a 3p hike in the additional rate.

Official estimates suggest it would raise an extra £312m for the Welsh government.

Plaid is proposing to use the extra cash raised to fund a £317m package of measures, including an 8% pay increase next year for NHS workers, a rise in the minimum wage for social care workers to £12 an hour, and a mortgage rescue scheme.

It says the cash could also be used for a 'Welsh Solidarity Fund" that could be used to extend free school meals for secondary school pupils in receipt of benefits, to increase the Education Maintenance Allowance for students, or help people struggling to pay their mortgages.

Plaid Cymru's leader Adam Price said the Welsh government has been short-changed by Westminster but ministers in Cardiff were "not powerless" to act.

Mr Price said: "An unprecedented crisis calls for genuine solutions.

"Our NHS is in crisis. Waiting times are at an all-time high, patients are trapped waiting for treatment and diagnosis and the legacy of over a decade of real-term cuts to wages has led doctors, nurses and healthcare professionals to the picket line or to leave the profession entirely.

"And, of course, it's not just the NHS - workers everywhere are on strike for fairer pay and better work conditions.

"The economic crisis has left households across Wales unable to put food on the table. This is what 13 years of Tory cuts and 25 years of Labour mismanagement has done to our communities."

Last autumn, a majority of Plaid Cymru's Senedd members voted for a 4p increase in the higher rate and a 5p rise in the additional rate, but the idea was never formally announced.

A Welsh government spokesman said: "Now is not the right time to raise the basic rate of income tax as it would hurt many who are already struggling with rising inflation and higher energy bills.

"Increasing the higher and additional rates of income tax in the way Plaid Cymru are proposing would only raise £75m - the bulk of the revenue raised under these proposals would come from basic rate tax payers in Wales.

"In line with our commitment not to take more in Welsh rates of income tax from people for at least as long as the economic impact of Covid-19 lasts, we are proposing no change to any of the current rates for Welsh rates of income tax for 2023-24."

Conservative leader in the Welsh Parliament Andrew RT Davies said: "Plaid Cymru's so-called "co-operation agreement" with Labour is a coalition in all but name. If they really lacked faith in Labour ministers in the Senedd, they would stop propping them up.

"Instead, they're trying to have all the good things of government without taking responsibility. The result is typical voodoo economics from Plaid, trying to spend the same pound twice.

"Under the UK Conservative government, Wales gets £1.20 for every £1 spent in England. The money is there but Labour and Plaid mismanagement is short-changing Wales and our NHS."