To mark the 150th year anniversary since the birth of David Lloyd George, Kirsty Williams, Leader of the Welsh Liberal Democrats, has called for a new People’s Budget for Wales using powers proposed in the Silk Commission for the Assembly to lower taxes for Wales’ lowest paid workers.
Writing for the Institute of Welsh Affairs’ blog ‘Click on Wales’, Kirsty Williams argues that if Wales were to be given income tax varying powers, the Welsh Liberal Democrats would want to lower the basic income tax rate from 20% to 18% to make the tax system fairer and continue David Lloyd George’s progressive and Liberal principles.
In the article, Kirsty Williams, Leader of the Welsh Liberal Democrats writes:
“Today seems like an opportune moment to consider how a future Welsh government can continue David Lloyd George’s radical and redistributive legacy.
“We must take the opportunity of the Silk Commission to think big. As Lloyd George himself said, “You can’t cross a chasm in two small jumps.” We must take the opportunity to create a new People’s Budget for Wales.
“For the first time, the Silk Commission would give the National Assembly the power to make the tax system more progressive. Crucially, it recommends that the National Assembly would be able to vary the rate of tax for each of the tax rates by themselves. As a result, it would be possible to lower the tax rates for the poorest. A reduction in the basic rate from 20% to 18% would save the average worker in Wales £750 a year and would cost around £360 million.
“The real challenge though would be to look at other, more innovative ways that we could raise taxes. I believe that environmental taxes must play a bigger part in how we raise revenue. This fulfils Lloyd George’s aims as well – shifting the burden of taxation away from things society considers to be good (having a job and earning an income) and onto things that society considers to be bad (polluting the environment).
“Making up £360 million in such taxes may well be difficult, but it is something the Welsh Liberal Democrats want to prioritise so that we can realise our aim of fairer taxes while at the same time supporting a stronger economy.
“My party will remain committed to reducing the tax burden for those on average income and restructuring the tax system so it delivers both a fairer society and a stronger economy.
“I am already pleased that Liberal Democrats in government in Westminster have cut taxes on the lowest paid by increasing the threshold for the personal allowance. But this does not mean Wales, with her radical political tradition, should not try to do more.
“David Lloyd George is rightly remembered as a radical thinker and as the people’s champion. He spent his life working to build a nation which was fair and prosperous and enabled everyone to reach their potential. Our circumstances may have changed in the century-and-a-half since his birth, but those principles remain as important now as they were then.”