Income tax won't be increased in Wales after mini-budget scrapped, Mark Drakeford says

Mark Drakeford speaks to ITV Wales' Rob Osborne

Wales' First Minister has revealed it is "unlikely" income tax rates will be increased following the scrapping of the UK Government's mini-budget.

In an interview with ITV News, Mark Drakeford said "the new circumstances" which saw the new chancellor Jeremy Hunt rip up Kwasi Kwarteng's economic plans, made the case "significantly different".

The plans included cutting the basic rate of income tax in England from 20% to 19%, in a move that had been forecast would cost the Exchequer almost £5.3 billion in 2023-24.

Mark Drakeford told Rob Osborne the possibility of keeping the rate at 20% in Wales in order to raise funds was an "open question" last week, but things have since changed.

Plaid Cymru called on the Welsh Government to use their tax-varying powers to raise £200m to tackle the cost of living crisis.

"I don't think we will be doing it", Mr Drakeford said.

"When the Chancellor was going to cut income tax we did have a choice. If Welsh rates were to rise, people in Wales would be paying more.

"I don't believe in a recession responsible governments take purchasing power out of the economy.

He added, "We do things in Wales in an orderly way. We have a budget-making process and we're in the middle of it at the moment. "Things may be chaotic at the other end of the M4 but we will continue to offer stable predictable government here in Wales, making the decisions we have to make when we have the full facts in front of us and we won't know until 31 October exactly what we're facing next year."

Despite Mr Drakeford labelling the prime minister's original economic plans as "fundamentally flawed", he said Jeremy Hunt's scrapping of the mini-budget has put him at the front of the "anti-growth coalition".

Chancellor Jeremy Hunt speaking to the nation from the Treasury in London, during an emergency statement. Credit: PA

Mr Hunt said his tax cut reversals will raise some £32 billion a year as part of efforts to get the public finances back on track after market and mortgage turmoil.

But, the First Minister said, "a growing economy needs... investment in infrastructure and investment in human capital this budget will strip out of the economy all the things that would make it a future success", he added.

In a tweet about an hour after the chancellor’s statement, the prime minister said: “The British people rightly want stability, which is why we are addressing the serious challenges we face in worsening economic conditions.

“We have taken action to chart a new course for growth that supports and delivers for people across the United Kingdom.”