Welsh Labour pledges income tax freeze at manifesto launch

Welsh Labour leader Eluned Morgan is pledging to freeze income tax rates in Wales if her party wins May's Senedd election.

Since 2019, Welsh ministers have had the ability to raise or lower the three rates of income tax in Wales but have never done so.

Morgan, who unveils details of her party's offer to voters on Monday, said she was focussed on tackling the cost of living crisis and "putting money back in people's pockets".

Voters in Wales go to the polls on 7 May to elect 96 member to the Welsh Parliament.

Currently, Welsh ministers can vary income rates set by the UK government but do not have powers over the income levels at which people pay three different rates of the tax:

• Income tax is set at 20% for people earning between £12,571 and £50,270
• Earnings between £50,271 and £125,140 are taxed at a 40% rate
• There is a 45% additional rate for income over £125,140

The Welsh government and Senedd has power over 10 percentage points of each income tax rate.

According to the Institute for Fiscal Studies, the Welsh rates of income tax were forecast to raise £3.6bn in 2025-26.

Morgan, who will be in Swansea to unveil her party's election manifesto, is expected to say that the income tax freeze is part of Welsh Labour's "focus on tackling the cost of living and putting money back in people's pockets".

'Real help'

She will tell an audience of party members and candidates: "Today, I make a clear promise to the people of Wales: in the next Senedd term, a Welsh Labour government will not raise income tax.

"Fairness starts with understanding the pressure families face, but fairness also means action.

"This manifesto delivers real help with the cost of living.

"We will cap single bus fares at £2 across Wales, we will keep the £1 fares for young people and free travel for over-60s, and we will create 20,000 new childcare places, expanding provision from nine-months-old so families can work and get on.

"Fairness means making everyday life that little bit easier."

She is also expected talk about plans to create jobs, invest £4bn to build new hospitals, tackling environmental issues and raising school standards.