Latest news with #Drakeford
Wales Online
a day ago
- Business
- Wales Online
Welsh Government to use £36m to bail out UK Government
Welsh Government to use £36m to bail out UK Government The changes to National Insurance have led to a huge bill for Welsh public services Wales' finance minister Mark Drakeford (Image: Welsh Government ) The Welsh Government has said it will find £36m from its reserves to plug a gap created by a UK Government tax change. The UK Labour government has upped the amount employers have to pay towards National Insurance. Until April, businesses had to pay a rate of 13.8% on employees' earnings above £9,100 a year, but that was increased to 15% on salaries above £5,000. The employment allowance - the amount employers can claim back from their NI bill - was increased from £5,000 to £10,500. The UK Government said the changes would eventually raise £25bn a year however there was widespread concern from charities and businesses in particular about how they would pay the extra money. For our free daily briefing on the biggest issues facing the nation, sign up to the Wales Matters newsletter here It means an extra £257m bill for the Welsh public sector - which includes health boards, all 22 councils and Natural Resources Wales - and the Welsh Government had called on its party colleagues in London to fully fund the difference to public sector organisations. However, the UK Government provided Wales with a Barnett share of funding, instead of meeting the actual costs to the Welsh public sector. Wales' finance minister Mark Drakeford had said the chancellor's decision was "wrong" and went against an advisory document prepared between the two governments. Article continues below Councils had said they were going to be left £20m short, and you can read an interview about that here. Now Mr Drakeford has said £36m will be paid from Welsh Government reserves while the the Treasury provided £185m but there is still £36m left to find. He has said the Welsh Labour administration will "continue to press" for the full costs to be covered. He told the Senedd: "We should have been compensated for the actual costs not the Barnett share of the costs in England. Treasury ministers had a choice to make, I believe they made the wrong choice." Wales' finance minister Mark Drakeford said: "The UK Government has provided £185m in funding to Wales following its decision to increase employer NICs in the autumn UK Budget. "However, this falls significantly short of the £257m devolved public sector employers in Wales need to meet the increased NICs costs they face. "This shortfall, of more than £70m, is a result of the UK Government decision that Wales should receive a Barnett consequential of the additional costs to devolved public sector employers in England, rather than the actual costs. "The £185m will be passed on in full to devolved public sector employers in Wales. I will also provide an additional £36m from the Wales reserve. Article continues below "This creates a total package of £220 million to support our public services, including further education, with increased NICs costs. The Welsh Government faces significant financial challenges and drawing down £36m from our limited reserves reduces our ability to respond to other emerging pressures throughout the year. "However, we have concluded that providing additional support for essential public services is necessary to minimise the impact on Welsh citizens who rely on these services."
Yahoo
4 days ago
- Business
- Yahoo
NI hike leaves hole in Wales' budget
Higher National Insurance payments for doctors, nurses and teachers has left the Welsh government with a £36m hole in its budget, according to the finance minister. Last year, the UK government increased the amount employers have to pay in National Insurance (NI) with the Welsh government, which employs tens of thousands of public sector workers, left with a £257m bill. The Finance Minister Mark Drakeford said he had added £36m from Welsh government reserves while the the Treasury provided £185m to help plug the gap. However, it still leaves £36m to find, which could come from cuts to other services, as Drakeford said the government "cannot afford to cover the entire shortfall". What is National Insurance and how is it changing? Drakeford criticises Reeves on NI rise compensation "The UK government should treat the public sector the same across the UK and make good on its pledge to fully fund these extra costs," he added. The row is the latest dispute between the Labour administrations in Cardiff and London ahead of next year's Senedd elections. First Minister Eluned Morgan said earlier this month she would "not stay silent" if Sir Keir Starmer's government takes decisions "we think will harm Welsh communities". Welsh ministers have tried and so far failed to get extra cash to cover the rise in National Insurance contributions for the public sector. Their argument has been that the normal way of working these things out - the Barnett formula - does not take into account the disproportionate size of Wales' public sector compared to England. Plaid Cymru and the Welsh Conservatives criticised the UK government decision to increase the tax in the first place and also want full compensation for Wales. Expect them to seize on this and claim Wales is being hit by a double whammy - the increase is harming both Welsh businesses and the public sector. Welsh Labour's relationship with UK Labour, and whether two Labour governments working together is better for Wales is becoming one of the main themes of next year's election campaign.
Pembrokeshire Herald
5 days ago
- Business
- Pembrokeshire Herald
Next generation of tidal turbine blades to be developed in Wales
MARK DRAKEFORD unveiled plans to cut business rates for around 13,000 smaller 'bricks and mortar' shops while raising the amount payable for higher value properties. The First Minister-turned-finance secretary launched a 12-week consultation on proposals to adjust the multipliers for business rates, which are officially known as non-domestic rates. In a written statement on May 20, Prof Drakeford said the Welsh Government intends to make use of new powers to bring in 'differential multipliers' for the first time from April 2026. He proposed introducing a lower multiplier – a key determinant of bills – for small- to medium-sized retail shops, kiosks and post offices, with a rateable value below £51,000. 'This proposal recognises the unique challenges faced by the 'bricks and mortar' retail sector, not least through their exposure to competition from online retailers,' he said. 'It would be intended to help rebalance the non-domestic rates system in favour of retail shops, to support the ongoing viability and sustainability of the sector.' Prof Drakeford said the Welsh Government also plans to bring in a higher multiplier for the largest properties, with rateable values of more than £100,000. He wrote: 'This would help to offset the revenue … forgone through the proposed retail multiplier and ensure the standard multiplier (applicable to all properties which would not be subject to the retail or higher multiplier) could be set at the lowest possible level.' Prof Drakeford added: 'The first use of any new powers will highlight practical considerations which inevitably arise in implementing innovative policy action. 'This relatively modest proposal will allow these matters to be identified and resolved, laying the ground for further reform in the future.' The levels of multipliers will be determined as part of the Welsh Government's 2026/27 budget, which will be set at the end of 2025, taking the next rates revaluation into account. According to the consultation, the increase in the higher multiplier would offset revenue lost through the retail multiplier – with no change in the overall amount raised. Around 3,200 properties in Wales would pay rates based on the higher multiplier. The higher multiplier would not apply to properties occupied by public sector bodies, such as hospitals, surgeries, schools, colleges, museums, universities, courts and police stations. But the consultation document warned it would not be possible to exclude more generic property types, such as offices, occupied by public services. A lower multiplier applies to properties in England with rateable values under £51,000, and further lower multipliers for retail, leisure and hospitality properties are on the horizon. The UK Government will also introduce a higher multiplier for properties with rateable values of £500,000 and above in 2026/27. Scotland sets three differential multipliers and in Northern Ireland, a central rate is supplemented by a rate set by each district council.
Pembrokeshire Herald
27-05-2025
- Business
- Pembrokeshire Herald
Drakeford plans business rates shake-up
MARK DRAKEFORD unveiled plans to cut business rates for around 13,000 smaller 'bricks and mortar' shops while raising the amount payable for higher value properties. The First Minister-turned-finance secretary launched a 12-week consultation on proposals to adjust the multipliers for business rates, which are officially known as non-domestic rates. In a written statement on May 20, Prof Drakeford said the Welsh Government intends to make use of new powers to bring in 'differential multipliers' for the first time from April 2026. He proposed introducing a lower multiplier – a key determinant of bills – for small- to medium-sized retail shops, kiosks and post offices, with a rateable value below £51,000. 'This proposal recognises the unique challenges faced by the 'bricks and mortar' retail sector, not least through their exposure to competition from online retailers,' he said. 'It would be intended to help rebalance the non-domestic rates system in favour of retail shops, to support the ongoing viability and sustainability of the sector.' Prof Drakeford said the Welsh Government also plans to bring in a higher multiplier for the largest properties, with rateable values of more than £100,000. He wrote: 'This would help to offset the revenue … forgone through the proposed retail multiplier and ensure the standard multiplier (applicable to all properties which would not be subject to the retail or higher multiplier) could be set at the lowest possible level.' Prof Drakeford added: 'The first use of any new powers will highlight practical considerations which inevitably arise in implementing innovative policy action. 'This relatively modest proposal will allow these matters to be identified and resolved, laying the ground for further reform in the future.' The levels of multipliers will be determined as part of the Welsh Government's 2026/27 budget, which will be set at the end of 2025, taking the next rates revaluation into account. According to the consultation, the increase in the higher multiplier would offset revenue lost through the retail multiplier – with no change in the overall amount raised. Around 3,200 properties in Wales would pay rates based on the higher multiplier. The higher multiplier would not apply to properties occupied by public sector bodies, such as hospitals, surgeries, schools, colleges, museums, universities, courts and police stations. But the consultation document warned it would not be possible to exclude more generic property types, such as offices, occupied by public services. A lower multiplier applies to properties in England with rateable values under £51,000, and further lower multipliers for retail, leisure and hospitality properties are on the horizon. The UK Government will also introduce a higher multiplier for properties with rateable values of £500,000 and above in 2026/27. Scotland sets three differential multipliers and in Northern Ireland, a central rate is supplemented by a rate set by each district council.
South Wales Argus
26-05-2025
- Business
- South Wales Argus
Councillor invites Mark Drakefore to visit Blackwood
Independent councillor Kevin Etheridge extended the invitation following the announcement of a review of business rates by finance minister Mark Drakeford. Mr Drakeford unveiled plans to cut business rates for around 13,000 smaller 'bricks and mortar' shops while raising the amount payable for higher value properties. He also launched a 12-week consultation on proposals to adjust the multipliers for business rates, which are officially known as non-domestic rates. More: Newport leading way in new industrial revolution In a letter to Mr Drakeford, Mr Etheridge said: "You will be aware that many of our towns are suffering because of the high business rates, and over the last several years I have constantly received queries." He also asked for clarification on several points regarding the review, including how the recalculation will work, whether there will be an appeals procedure if banding is disagreed with, and how the lower and higher multiplier will be calculated. More: Landlords of pub ban under 25s on busy nights because they cannot behave He also asked for a definition of small and medium retail shops, who decided on the rateable value below £51,000 and more than £100,000, and whether preference and priority will be given to traders on the high street. Mr Etheridge also asked whether the proposals can be amended if there is a change of government at the Senedd Elections in May 2026, and whether the Senedd has set up a financial working party to investigate these matters.
