What can Wales expect from the chancellor's summer statement?

Rishi Sunak preparing today's summer statement Credit: UK Treasury

Don't be put off by the bland title 'summer statement.' What the chancellor will unveil today is a budget in all but name.

Rishi Sunak is expected to set out plans to spend large amounts of money helping businesses weather the coronavirus crisis using tax changes, training schemes and other financial incentives.

All of them would have seemed unlikely even a year ago, and are even more remarkable following a decade of belt-tightening which the Prime Minister has made clear is well and truly over.

It'll be complicated for us here in Wales to work out what affects us and what doesn't.

Some of it applies directly, some of it will lead to extra money for the Welsh Government which may or may not follow suit - and some of it won't affect us at all.

Read the latest: Calls for stamp duty action in Wales after Chancellor Rishi Sunak announces tax relief for house buyers in England

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Here's my guide to what to look out for.

A new Kickstart scheme will be set up to encourage work placements for young people Credit: PA
  • Training and young people

The chancellor has already announced this morning that a new Kickstart scheme will be set up to encourage work placements for young people on benefits and at risk of long term unemployment. The UK Government will cover employers' costs of taking on an unemployed young person for six months at minimum wage. Employers can top up those wages.

This is a UK-wide scheme so will be offered to employers in Wales.

The chancellor has already announced that firms in England will get £1,000 cash bonuses to hire trainees. The Welsh Government will get £7m as a result of the spending in England. Ministers here won't be obliged to follow suit.

Money to encourage green homes in England will be made available in Wales - but it is not known if the Welsh Government will follow suit Credit: PA
  • Green jobs/Green homes

It has already been announced that there will be £3bn to be spent supporting ‘green jobs’ and giving householders in England grants to improve their homes. Those grants will only be available in England - here housing is the responsibility of the Welsh Government. At least some of the £3bn total should trigger extra money for the Welsh Government but that amount will not be known until Wednesday afternoon and Welsh ministers are not obliged to follow suit. 

  • Stamp duty

It's been widely reported that the chancellor will aim to boost the housing market by cutting stamp duty or rather by raising the amount at which a buyer begins paying the tax. However, stamp duty doesn't apply here in Wales where the Welsh Government collects revenue from its own version, Land Transaction Tax.

LTT has been set broadly in line with stamp duty, but is more generous at the lower end:

  • In England currently you pay nothing if you buy a house up to the value of £125,000. You pay 2% on £125-£250,000 and 5% on £260-925,000. 

  • In Wales you currently don't pay Land Transaction Tax in Wales if you buy a house up to the value of £180,000. On any extra value between £180,000 - £250,000 you pay 3.5%. You pay 5% on £250,000 - £400,000. The rates continue to vary up to 12% on £1.5m and over.

Business rates are fully devolved to Wales and known as Non-Domestic Rates. Credit: PA
  • Business Rates

If Rishi Sunak makes changes to business rates, they will only apply in England. It is thought they would be temporary measures such as grants or making more businesses exempt, because a full review of business rates in England is due in the autumn. 

Business rates are fully devolved to Wales and known as Non-Domestic Rates. There is a business rates relief scheme for small businesses. 

  • Furlough

There are likely to be changes announced to the furlough scheme. There have been calls for it to continue for some sectors or for individual schemes for particular sectors, eg steel, aerospace. The furlough scheme is UK-wide and funded by Westminster.

  • Job Centres

It is thought there will be a large increase in the number of ‘work coaches’ and other measures such as setting up Job Centres in supermarkets. The benefits system isn't devolved so Wales would be included in these changes.

  • NICs

National Insurance Contributions (NICs) could be cut or the threshold raised for targeted groups, eg young people. This part of the tax system isn't devolved so would affect Wales. 

Any extra money for the NHS in England hould trigger extra funding for the Welsh Government Credit: PA
  • NHS

There’s expected to be more money for the NHS which, if it is ‘new’ money, should trigger extra funding for the Welsh Government - which wouldn’t be obliged to spend it on the NHS. NHS England is said to be demanding £10bn but the Treasury is said to be resisting committing that amount. 

  • Encouraging spending

There are likely to be measures to encourage spending in order to boost the economy. Most likely a cut in VAT. In 2008 crisis VAT was cut by 1%.

This time there are calls for bigger cuts. VAT isn’t devolved so this move would include Wales.