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Wales

To help build an economy that works for Wales, the Budget announces:

A new three-year scheme will exempt new businesses from up to £5,000 of employer National Insurance Contributions (NICs).  Any new business set up from 22 June which meets the criteria set out in the forthcoming announcement will benefit from the scheme. Over 27,000 businesses in Wales will benefit.

The impact of the employer NICs rate rise previously announced will be largely reversed. This will lead to a saving of around £140 million in Wales.

The Budget 2009 proposal to repeal the special tax rules for furnished holiday lettings will not be implemented. Instead, the Government will consult over the summer on an alternative proposal. This will benefit an estimated 4100 individuals in Wales who have income from furnished holiday lettings.

The Income Tax personal allowance for those aged under 65 will be increased by £1000 in cash terms, taking it from £6475 in 2010-11 to £7475 in 2011-12. In Wales almost 1.1 million basic rate taxpayers will gain from this measure.

The Government will increase the basic State Pension in April 2011 by the equivalent of RPI. This will benefit 0.6 million pensioners in Wales.

The Budget sets out the path that the Government will take for reducing spending over the course of this Parliament. Full details of the Spending Review, which will have implications for Wales, will be set out on 20 October.

The following statistics illustrate the current economic landscape in the Wales

In Wales in the latest reported full year, 2008:

• Wales contributed £45.6bn to UK economic output. This was 3.6 per cent of the UK’s total economic output [1];
• the average economic output per person was £15,237. This is below the UK average of £20,520 [1];
• 9,290 new businesses were started, accounting for 3.4 per cent of new business started in the UK [2];
• the public sector employed 319,000 people, which accounted for 23.9 per cent of total employment [3]; and
• the private sector employed 1.02 million people, which accounted for 76.1 per cent of total employment [3].

The latest labour market figures for Wales, from the three months to April 2010 [4], show:

• that 1.32 million people aged 16 and over were in employment. This was 69.3 per cent of people in Wales aged 16 to State Pension age; and
• 123,000 people aged 16 and over were unemployed. This was 8.5 per cent of all employed and unemployed people aged 16 and over in Wales.
  

Sources

1. Office for National Statistics: Regional, sub-regional and local gross value added, 9 December 2009 (PDF, opens in new window)
2. Office for National Statistics: Business demography 2008, 30 November 2009 (PDF, opens in new window)
3. Office for National Statistics: Regional analysis of public sector employment, September 2009 (PDF, opens in new window)
4. Office for National Statistics: Labour Market Statistics Regional Monthly Data, 16 June 2010 (opens in new window)

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