Benefits

"There aren’t many upsides to the current situation", write Stuart Adam and Helen Miller. "Using it as an opportunity to fix some bits of our tax system could be a silver lining."

On Tuesday (12 May 2020) the Chancellor, Rishi Sunak, announced an extension to the Coronavirus Job Retention Scheme (CJRS), which covers 80% of employees’ usual salaries, up to a cap of £2,500 a month, while they are furloughed.

On the eve of the economic crisis caused by the public health response to coronavirus, around 76,000 working-age families were subject to the benefit cap. The cap means that most of these families, and some of those who have since lost employment during the crisis won’t benefit at all from the temporary increases in benefits announced by the Chancellor. The cap provides a strong financial incentive for families to move into paid work or to move to cheaper housing; but this is less important, and in many cases undesirable, at the present time. Raising or removing the cap so that all working age benefit recipients can benefit from the temporary increase in support would make sense, at least while the current social distancing requirements are in place.

The coronavirus pandemic is a public health crisis and global economic shock increasingly affecting lower-income countries around the world – external finance from international institutions and development partners can help plug financing gaps, but may become stretched as many countries around the world seek assistance.

The coronavirus pandemic is first and foremost a public health crisis. But it also represents a large and systemic economic shock, with massive effects on both the supply and demand sides of the economy.

Today (26 March 2020) the Chancellor announced new, very generous support for the self-employed. Those who earn the majority of their income from self-employment and who had average profits of no more than £50,000 over the last three years will be eligible for a taxable grant equal to 80% of the average profits they reported across the three years from April 2016 to April 2019, up to a cap of £2,500 per month, if they report that their income has been negatively impacted as a result of coronavirus.

This presentation was delivered as part of the IFS press briefing following the Spring Budget 2020.

The three main political parties offer voters starkly different choices on tax, writes Stuart Adam of the IFS.

In their manifestos, both the Labour party and the Liberal Democrats have promised to extend free school meals to more children. The Labour party would introduce free school meals for all children in primary schools, while the Liberal Democrats would offer them to all secondary-school pupils whose families are receiving universal credit as well. Meanwhile, in their manifesto the Conservative party promises to “maintain our commitment” to free school meals – which we interpret as a plan to keep policy as it is.

The Government of India has taken a positive step in evaluating the workings of the GST. But fundamental reform could bring about a simpler, fairer and more efficient tax system.

This presentation was given by Robert Joyce at the 2019 General Election manifesto analysis briefing.

This presentation was given by Stuart Adam at the 2019 General Election manifesto analysis briefing.