|Date:||19 November 2015|
|Publisher:||Institute for Fiscal Studies|
On 8 July 2015, Chancellor George Osborne delivered the first Budget of the new all-Conservative administration, implementing a number of changes to taxes and benefits proposed by the Conservative party during the 2015 General Election campaign. These included increases in the income tax personal allowance and higher rate threshold, restrictions in tax relief on pension contributions and an increase in the inheritance tax nil-rate band for homeowners. Furthermore, full details of the Conservatives’ promised cuts to social security benefits and tax credits were outlined for the first time, including a four year freeze on most benefits received by those of working age, substantial reductions in the amount of support provided through working tax credit and, in future, universal credit to low-income working families and, for new claimants and new births, limiting the child element of tax credits and universal credit to two children. But these are not the only changes to the tax and benefit system that will be introduced over the next few years. A number of reforms announced during by the previous Conservative-Liberal Democrat coalition government during its period in office were not fully implemented by May 2015, and are now set to be implemented by the current government. The most important of these is the integration of six working-age benefits and tax credits into universal credit: a very significant change to the structure of the benefits system for those of working age. These changes will all have an impact on household incomes, and on the incentives individuals face to enter paid work or increase their earnings.
These changes will have different impacts on different people depending not just on their income levels and family circumstances but on their age, disability status, housing tenure and consumption patterns. Because population characteristics vary across different parts of the UK, it is likely that there will be regional differences in the impact of the tax and benefit policies, despite the same policies being introduced in England, Wales, Scotland and Northern Ireland. In this report, we examine the impact of the changes to be introduced between April 2015 and April 2019 in Wales and compare this to average impacts across the whole UK.
Effaith diwygiadau Llywodraeth y DU ym meysydd treth, lles ac isafswm cyflog yng Nghymru (The report is available here in Welsh.)