The State of Britain

Welsh unemployment sees the biggest jump in the UK, Welsh house prices have the biggest increase in Great Britain and income tax is partially devolved to Welsh ministers

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Unemployment in Wales increased by 6,000 to 71,000 between December and February; an uplift of 0.4% to 4.5% -.the biggest jump in the UK. The SW of England had the lowest unemployment rate in the country at 2.6% and the NE of England had the highest at 5.6%. The national unemployment rate stands at 3.9% and UK average earnings grew by 3.5% or by 1.6% after inflation. Scotland’s unemployment rate is at a new record low of 3.3% as is Northern Ireland’s rate at 3.0%; the UK rate is now lower than at any time since the end of 1975.

Welsh average property prices ticked up by 0.2% to £159,559 during the month which meant prices increased by 4.1% over the year – the biggest increase in Great Britain. In comparison, UK prices dropped by 0.8% to £226,234 during April which cut the annual growth rate to 0.6%.

Welsh ministers can now adjust income tax by 10p in the £1 although the Welsh Government has confirmed rates will not change in 2019-20; ministers have also said a change in rates before the 2021 assembly election is unlikely. From this month 10p in each band will go directly to the Welsh Treasury. The personal allowance – the amount people can earn before they pay tax – as well as the level of income at which the higher and additional rates apply remain the same in Wales as in England and Northern Ireland. Ministers will no doubt be observing whether there is any evidence of a ‘brain drain’ in Scotland, where rates for higher earners have recently been increased and personal allowances effectively cut in comparison with other parts of the UK.

The Welsh Government has also argued it should have powers over air passenger duty (APD), allowing it to attract more long-haul flights, but UK ministers said it would give Cardiff an unfair advantage over rivals, especially Bristol. In Scotland, Holyrood, which has the power to vary this tax, had planned to halve APD with a reduced air departure tax (APT) but this has been abandoned after the SNP bowed to environmental pressure.

Flybe has cited APD as a reason why it is struggling to deliver its strategy of better connections between UK airports. Announcing the end of its jet operations and servicing operations from state owned Cardiff airport, the airline will only continue to offer turbo-prop flights which will mean the destinations offered will be reduced.

The Trostre steel plant in Llanelli, Carmarthenshire, could be sold as part of an EU competition probe into the deal to merge Tata Steel with German steelmaker Thyssenkrupp. The Carmarthenshire plant, which produces tin used in the food industry, employs 650 workers. The European Commission is investigating the proposal over concerns over competition.

Also in Carmarthenshire, Japanese firm Calsonic Kansei looks likely to cut 95 staff from its Llanelli factory. The firm employs c300 people at the plant which develops cooling systems and air conditioning components for car industry customers like Toyota, Nissan and Honda. The company was offered a £4.4m grant by the Welsh Government to create 88 jobs but this has not been claimed by the firm. The automotive industry in Wales includes 40 component firms, 100 firms in the supply chain, has c£3.2bn in sales and employs 18,000. Calsonic Kansei and the Welsh Government blamed Brexit but state policies to ban diesel and petrol engines within 20 years are also a contributory factor.

In Anglesey, Amlwch – the most northerly town in Wales – will be badly affected by German firm Rehau’s decision to close its plastics factory following a significant drop in demand; more than 100 staff could be made redundant. The plant produces a type of polymer called PVC Edgeband, used on desks and furniture; the firm’s other factory in Blaenau Ffestiniog will not be affected.

On development, a £30m regeneration of a seaside promenade in Rhyl could see the Queen’s Buildings turned into a mix of retail and food outlets, a contemporary market, offices and flats; the project also includes the former Savoy Hotel and Queen’s Market buildings. The project will be funded by Denbighshire council, the Welsh Government and the European Regional Development Fund – subject to planning permission. Similarly, proposals to regenerate the Pier Hotel and the former Dunraven Court – vacant for 20 years – in Porthcawl are underway.

Like many UK resorts, Rhyl and Porthcawl has declined in popularity since the 1970s but the depreciation of the pound, last summer’s hot temperatures, and worries about passport queues and car insurance on the continent is sparking renewed interest in staycations in Wales this year. The 10m annual overnight trips to Wales result in visitors spending more than £17m a day or about £6.3bn a year.

On interventions, the Welsh Government has set up the £6.5m Circular Economy Fund to help businesses go plastic-waste free, trying to keep resources in circulation instead of being incinerated or ending in landfill. Companies can apply for grants of £25,000 to £750,000 to increase their use of recycled plastics. Ministers hope it will help Wales hit its target of recycling 70% of its waste by 2025 and 100% by 2050.