Election Briefing Note 5 shows how households have been affected by Labour's tax and benefit reforms. This Election Briefing Note discusses further tax֢enefit reform that Labour proposes to introduce if re-elected. The first section discusses three ѣredits' the government is proposing to introduce ֠the integrated child credit, the pension credit and the employment tax credit. We analyse their likely effect on household incomes and how much each would cost to introduce.

The new credits represent developments of tax֢enefit reforms implemented in the last Parliament, but Labour's manifesto also contains proposals for ѡsset-based' welfare, which would represent more of a new departure. In particular, the party plans to introduce two new policies ֠the Child Trust Fund and the Saving Gateway. Both are targeted towards low-income households and provide financial assistance in the form of assets. This method of asset-based welfare delivery contrasts with (and is intended to complement) the traditional approach of providing social security benefits as income supplements. Section 2 considers some of the arguments for and against the proposed new approach.

Finally, we consider Labour's approach to income tax.

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