UK Government to buy Wylfa in £160m deal

Chancellor Jeremy Hunt has cut workers' National Insurance by another 2p in the Budget, meaning it falls from 10% to 8%

He says the cut, to begin next month, is worth £450 a year for the average worker. But there is no change to income tax

Welsh Secretary David TC Davies said: “This is a hugely significant Budget for Wales which signals this government’s continued ambition to deliver for people across the country.

“The acquisition of Wylfa as a site for new nuclear development is fantastic news for Anglesey and the wider Welsh economy. It’s the next step on our path to an energy secure and net zero future, while also laying the foundations for a huge economic boost.

“Over 1.2 million working people in Wales will benefit from today’s announcement of a National Insurance cut and families will be better off as we raise the threshold for claiming Child Benefit.

“We are also continuing to invest directly in communities with £20 million for Rhyl, £5 million for Newport, £1.6 million in Theatr Clwyd and £10 million for Venue Cymru. And we have announced £5 million for an agri-food Launchpad which will support projects focused on issues like net zero farming across mid and north Wales.

“There will also be around £170 million in Barnett consequentials for the Welsh Government, on top of its record block grant, to spend on devolved responsibilities like health and education.

“This is a Budget that puts more money in the pockets of millions of people and shows that the UK Government continues to deliver for people across Wales.”

Mr Hunt also announced that the High Income Child Benefit Charge will be assessed on a household basis by April 2026, with a consultation to come on achieving this.

To ensure working families benefit from increasing their earnings before this change is made, the threshold to start paying back Child Benefit will increase in April from £50,000 to £60,000 – a 20% increase which will take 170,000 families UK-wide out of paying the charge this year – while Child Benefit will no longer need to be repaid in full until earnings exceed £80,000.

This represents a £1,260 boost on average for around half a million working families, rising to nearly £5,000 for some families when combined with tax cuts since Autumn Statement.

This will put an end to the current unfairness, where two parents earning £49,000 a year receive the full Child Benefit while a household with a single earner on over £50,000 does not. The OBR says the immediate changes to the HICBC will lead to an increase in hours worked equivalent to around 10,000 more people entering the workforce on a full-time basis.

The UK Government will also provide £10 million for Venue Cymru, Conwy through the Levelling Up Fund and £1.6 million towards the redevelopment of Theatr Clwyd, helping to secure the future of the largest producing theatre in Wales, known for its world class theatre productions and support of the Welsh Language.

A £360 million package will support innovative R&D and manufacturing projects across the life sciences, automotive and aerospace sectors, with a further £45 million of funding to accelerate medical research into common diseases like cancer, dementia and epilepsy – while the Green Industries Growth Accelerator will be allocated an extra £120 million to build supply chains for offshore wind and carbon capture and storage.

Opportunity will be spread across Wales, with millions in funding for Rhyl through the Long-Term Plans for Towns and the vital rural economy across Mid and North Wales. The future of Welsh nuclear has also been secured after the UK Government came to an agreement with Hitachi to acquire the Wylfa site in Ynys Môn. North Wales and Ynys Môn have a proud history in the nuclear industry, and the skills and expertise to support future projects with the potential to transform the local economy.

As a result of decisions at Spring Budget, the Welsh Government is receiving around £170 million in additional funding in 2024-25 through the Barnett formula. This comes on top of its record £15 billion per year settlement at Spending Review 2021 and the £820 million of additional funding it has received since then through the operation of the Barnett formula.

The Chancellor delivered further tax cuts for workers.

• Following a 2 percentage point cut in the Autumn Statement, the main rate of Employee National Insurance will be cut again by a further 2 percentage points from 10% to 8% in April – a one third reduction in the main rate of National Insurance which means the average Welsh worker on £30,100 will receive a tax cut of £700 compared to last year.

• Following a 1 percentage point cut in the Autumn Statement, the main rate of Class 4 NICs for the self-employed will be cut by a further 2 percentage points from 8% to 6% from April.

• The average gain for over 1.2 million Welsh workers from personal tax cuts delivered by the UK Government since Autumn is £640.

• High Income Child Benefit Charge (HICBC) will be administered on a household rather than an individual basis by April 2026, with a consultation in due course, while around half a million working families will benefit from an increase in the threshold from £50,000 to £60,000 and raising the level at which Child Benefit is fully repaid to £80,000 – worth £1260 per family on average.

• OBR says combined changes to NICs will lead to the equivalent of around 200,000 new full-time workers joining the labour market by 2028-29 as people increase working hours and move into work, while confirmed changes to the HICBC will bring in the equivalent of an additional 10,000 full-time workers.

• The main rates of fuel duty will be frozen again until March 2025 with the temporary 5p cut also extended, saving car drivers in Wales around £50 this year and £250 since the 5p cut was introduced – a £5 billion tax cut.

• The six-month alcohol duty freeze announced at Autumn Statement will be extended until 1 February 2025, saving consumers 2p on a pint of beer, 1p on a pint of cider, 10p on a bottle of wine and 33p on a bottle of spirit compared to if the planned rise had gone ahead. This will benefit 38,000 pubs across the UK while reducing inflation this year.

• The £90 fee for Debt Relief Orders, which freeze debt payments for 12 months, will be abolished and eligibility criteria widened so that more households struggling with problem debts can get the help they need, while the maximum period for Universal Credit budgeting advances will be extended from 12 months to 24 months.

• The higher rate of Capital Gains Tax (CGT) on property will be cut from 28% to 24% from April 2024, firing up the residential property market and supporting thousands of jobs that rely on it.

• The UK Government will extend the Investment Zones programme in Wales from five to 10 years, meaning Investment Zones in Wales will have access to a £160 million funding envelope per Investment Zone over 10 years. The UK and Welsh Governments are working together on proposals for the two selected Investment Zones in Wales, one located across Cardiff and Newport, delivered by the South East Wales Corporate Joint Committee and the other located across Wrexham and Flintshire, delivered by the North Wales Corporate Joint Committee.

• The 10-year window to claim Freeport tax reliefs has also been agreed with the Welsh Governments, meaning tax reliefs will be available until September 2034 in tax sites in the Anglesey and Celtic Welsh Freeports – encouraging investment by providing certainty on government support over an extended timeframe, delivering growth and jobs, and levelling up the Welsh economy.

• Rhyl will receive £20 million over ten years through the Long-Term Plan for Towns, giving it long term certainty to deliver projects based on local needs and priorities.

• The UK Government will support an agri-tech launchpad, in partnership with Ceredigion Council and Welsh Government, with £5 million to support business-led projects focused on vital issues like net zero farming. This will support the vital rural economy by delivering jobs, growth and higher productivity across Mid and North Wales.

• Small and medium sized businesses in Wales will be supported to invest and grow through a £200 million extension of the Growth Guarantee Scheme, helping 11,000 small businesses across the UK access the finance they need, and an increase in the VAT registration threshold from £85,000 to £90,000 which will take around 28,000 small businesses UK-wide out of paying VAT altogether.

• £45 million will fund medical research to develop new medicines for diseases like cancer, dementia and epilepsy.

• Pensions and savings reforms, including the introduction of a new UK ISA allowing an additional £5,000 annual investment in UK equities tax-free and new British Savings Bonds offering savers a guaranteed rate for 3 years, will deliver better returns for savers.

The Welsh Local Government Association (WLGA) has today called on the UK Government to reconsider its budget allocations to address the pressing needs of communities across Wales, expressing alarm over the lack of funding for public spending or investment.

Echoing similar calls by the Welsh Government, the WLGA maintains that the Chancellor's primary focus should be on prioritising investments in essential public services that are relied upon by all of us.

Cllr Anthony Hunt, WLGA Finance Spokesperson said: “We are deeply concerned about the implications of the Spring Budget for communities across Wales.

“The Chancellor talks about wasteful spending, but the reality is councils are on their knees thanks to his Government, with discretionary spending cut by up to 40% after adjusting for inflation. The local public services councils provide are experiencing unprecedented financial pressures and councils are considering all potential avenues to balance budgets. While they may manage in the short term, there is serious concern regarding the survival of vital local services. Local authorities are expected to deliver more with less funding, so the strain on councils cannot be overstated.

“Lack of investment in local government will only produce poorer outcomes for communities and will impact on councils’ ability to fund schools and social care, build social housing and invest in the transition to net zero.

“Thanks to this Budget, Welsh communities will be experiencing rises in Council Tax but can expect to see less for their money. This could have a devastating effect on individuals, families, and communities throughout Wales as this adds to pressures already felt due to the cost-of-living crisis and high inflation rates. The services that are the basis of the fabric of society are straining.

“The NHS and social care need to be funded on an equal basis as they are both part of the same system and have similar pressures. Despite additional funds announced for NHS, social care remains severely underfunded and overlooked, exacerbating existing pressures on local authorities as well as increasing the burden on the health service.”

Welsh Secretary David TC Davies said: “This is a hugely significant Budget for Wales which signals this government’s continued ambition to deliver for people across the country.

“The acquisition of Wylfa as a site for new nuclear development is fantastic news for Anglesey and the wider Welsh economy. It’s the next step on our path to an energy secure and net zero future, while also laying the foundations for a huge economic boost.

“Over 1.2 million working people in Wales will benefit from today’s announcement of a National Insurance cut and families will be better off as we raise the threshold for claiming Child Benefit.

“We are also continuing to invest directly in communities with £20 million for Rhyl, £5 million for Newport, £1.6 million in Theatr Clwyd and £10 million for Venue Cymru. And we have announced £5 million for an agri-food Launchpad which will support projects focused on issues like net zero farming across mid and north Wales.

“There will also be around £170 million in Barnett consequentials for the Welsh Government, on top of its record block grant, to spend on devolved responsibilities like health and education.

“This is a Budget that puts more money in the pockets of millions of people and shows that the UK Government continues to deliver for people across Wales.”

Jo Stevens MP, Labour’s Shadow Welsh Secretary, commenting on the government’s purchase of the Wylfa nuclear site, said: “A belated purchase is one thing but without a timeline and process for new nuclear at the site, it is more jam tomorrow from this tired government.

“We have lost five years since ministers watched the last project fall apart. That project would have been 50% completed by now, and we’d be seeing the benefits of thousands of construction jobs with 900 permanent jobs on the way.

“The fact is, this government’s dither and delay with Wylfa is just one more example of 14 year of Tory economic failure.”