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Welsh Labour leader Eluned Morgan has announced a commitment to keep income tax rates in Wales frozen if her party secures victory in the upcoming Senedd election this May. Since 2019, the Welsh government has held the authority to adjust the three tiers of income tax within Wales, but it has not exercised this power to modify the rates. Morgan’s announcement highlights her focus on easing the financial burden on families amid the ongoing cost of living crisis.
The upcoming election, scheduled for 7 May, will see Welsh voters choose 96 members to represent them in the Welsh Parliament. Although Welsh ministers can change the rates at which income tax is charged, they do not control the income thresholds that determine the tax bands. At present, the UK government sets these thresholds: 20% tax applies to earnings between £12,571 and £50,270, 40% to income ranging from £50,271 to £125,140, and a 45% additional tax rate for any earnings above £125,140. The Welsh government’s scope of influence lies in managing 10 percentage points from each of these rates.
According to analysis by the Institute for Fiscal Studies, the income tax rates managed by the Welsh government are projected to generate around £3.6 billion in revenue for the 2025-26 fiscal year. On Monday, Morgan will formalize these plans during a manifesto launch event in Swansea. She emphasized the importance of this tax freeze as part of a broader strategy to tackle inflation and return financial resources back to Welsh households.
Speaking directly to party members and candidates, Morgan pledged: “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.” Her manifesto also outlines additional measures aimed at reducing everyday costs, including capping single bus fares at £2 across Wales, maintaining £1 fares for young people, and providing free travel for those over 60. Plans also involve creating 20,000 new childcare places beginning from nine months of age to support working families, as well as initiatives targeting job creation, investments of £4 billion in new hospital construction, environmental challenges, and improvements to educational standards
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