Sunday, April 26, 2026
Deep cuts in services needed to deliver Refom and Tory tax cuts
Nation Cymru reports that an analysis of party manifestos undertaken by Cardiff University academics has found that tax cuts proposed by Reform UK and the Welsh Conservatives would require deep cuts in public services and would disproportionately benefit better off earners.
The news site says that the report by the university’s Wales Governance Centre states that the Welsh Conservatives propose lowering the basic rate [of income tax] by 1p in the pound, while Reform UK propose a 1p in the pound reduction across all three income tax bands. They add that both policies would be regressive:
"Under Reform UK plans, 90% of the gains would go to households in the top half of the income distribution, with 60% of the gains going to households in the top two deciles of income.
“The Welsh Conservatives propose lowering the basic rate by 1p in the pound. The latest estimates from the Welsh Government suggest this would cost £325 million in 2027-28. We project this cost would grow to £367m by 2030-31.
“Reform UK propose a 1p in the pound reduction across all three income tax bands. The manifesto promises to enact this tax cut by the end of the Senedd term; we estimate that this would cost £444m by 2030-31.
“At lower income levels, a significant share of income is not taxed due to the personal allowance, so the rate cuts apply to a lower share of income than for higher earners. Under the Conservatives’ proposals, the biggest beneficiaries relative to income would be those with a gross income of around £50,270, for whom the decrease in total tax liability as a share of income would be 0.75% (saving £377 annually).
“For Reform UK’s policy, the decrease in total tax liability as a share of income would peak at 1% for those with incomes above £125,140 (who would save £1,251 a year). Reform UK’s policy is regressive, with a typical household in the richest 10% of households gaining three times as much as a typical household in the 5th decile as a share of their income. 90% of the gains would go to households in the top half of the income distribution, with 60% going to households in the top two deciles of income.
“The Welsh Conservative policy is also broadly regressive, but to a lesser extent; the biggest relative gains would go to households in the 8th decile of income, with almost half of the gains going to households in the top two deciles of income.
“All parties propose reviews, reforms or specific reliefs for Non-Domestic Rates (NDR). NDR revenues have fallen by a fifth in real terms since 2019-20 and tax cuts would have an impact on resources available for public services.
“Reform UK and the Welsh Conservatives propose introducing a referendum requirement for council tax increases of 5% or more. Meanwhile, Plaid Cymru and Welsh Labour both promise to ‘make council tax fairer’. While carrying through the planned 2028 revaluation may fulfil this promise, the lack of further detail on what reforms both parties would implement is disappointing.
“We estimate total Welsh Conservative tax cuts could amount to approximately £705m by 2030-31, or 2.6% of day-to-day spending. On current spending projections, this would imply no real-terms growth in day-to-day spending over the next Senedd term.
“Reform UK’s explicit tax cuts could cost approximately £450m by 2030-31. … [The] fiscal outlook is highly uncertain and the underlying UK government spending plans and the economic forecasts will likely change substantially. But tax cuts on this scale would make deep cuts to some public services likely.
Neither party have said how they will finance these tax cuts, which could potentially starve key services like health, education and social care of resources. With public services in Wales struggling we need investment not cuts. These policies would be disastrous for Wales.
