Why don’t we just increase income tax to pay nurses more?


The Welsh Labour Government is often asked why it doesn’t increase income tax to fund the 17% pay rises being requested by the RCN for nurses. I addressed this in the chamber.

As you will be aware, the NHS had ensured historically high spending rises for much of the past decade, and the UK Conservative Government centralised cuts to health budgets have had considerable knock-on effects.

The estimated cost of an 1% NHS pay increase would be around £55 million – the only way we could raise this would be by increasing taxes on the only band that could meet the margin – the standard rate.
We simply do not have enough people paying the higher rate of tax in Wales. What this would mean is that people on lower incomes, who are already struggling through the cost of living crisis, would be forced to pay out even more.

Check out the calculations below:

1p on the Standard Rate (paid on income between £12,570 and £50,270) = £237m
1p on the higher rate (paid on income between £50,270 and £150,000) = £33m
1p on the additional rate (paid on income above £150,000) = £3m

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