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Government's Fiscal Policies

Volume 563: debated on Wednesday 15 May 2013

4. What discussions he has had with the Welsh Government on the effects on the economy in Wales of the Government’s fiscal policies. (153887)

I have regular discussions with the Welsh Government on economic issues. Action taken by the Government to deal with the deficit has helped keep interest rates at near record lows, helping families and businesses across Wales.

How many people in Wales have seen their personal tax-free income tax allowances increase since May 2010, and how many small businesses in Wales are set to benefit from the new £2,000 national insurance employment allowance being introduced next April?

The increase in the personal allowance announced by the Government will benefit 1.1 million taxpayers and remove 130 individuals from paying income tax altogether. More than 35,000 businesses in Wales will benefit from the national insurance employment allowance, with 20,000 of them being taken out of national insurance altogether.

I welcome the drop in unemployment in Wales—that is in sharp contrast to unemployment in England—and credit must go to the jobs growth fund introduced by the Welsh Government. What practical steps are the Secretary of State and the Government taking to work with the Welsh Government to eradicate long-term unemployment, which is rising in north Wales and in his and my constituencies?

The hon. Gentleman should also commend Welsh businesses, which are increasing the number of their employees, but certainly I am happy to commend initiatives by the Welsh Government. His point highlights the importance of the UK and Welsh Governments working closely together. That is something that we are prepared to do, and I expect to see reciprocation from the Welsh Government.

The UK Government-sponsored Silk commission recommended empowering the Welsh Government and Welsh local authorities with fiscal responsibility to incentivise economic development. Why were these recommendations not included in the Finance Bill or the Queen’s Speech in a Government of Wales Bill?

As the hon. Gentleman will know, the Silk proposals are still under consideration by the UK Government. We have always made it absolutely clear that we will announce our response to Silk this spring, so we will issue that response in the next few weeks.