Taxes and benefits

The government spends an astonishing £22 billion a year on housing benefit. That dwarfs spending on the police, on overseas aid and the budgets of many entire government departments.

Not only has the reduced system of council tax support hit low-paid workers but it has proved remarkably ineffective as a way to raise revenue, say the IFS’ Stuart Adam and Thomas Pope.

Since 2000, all households containing a person aged 75 or over have been entitled to receive a free TV licence, paid for by the government. From June 2020 onwards, the government will no longer provide the funds for these free TV licences and the BBC therefore has to decide whether to continue to provide free licences to all over the age of 75 from within its own funds. In this short observation, which will be submitted to the BBC as part of wide consultation, we look at incomes and poverty rates for the over 75s and how this has changed since free TV licenses were first introduced.

Today Amber Rudd, the Secretary of State for Work and Pensions, announced that the ‘two-child limit’ in tax credits and Universal Credit will not apply to children born before the policy was implemented in April 2017. This tackles the ‘retrospective’ application of the policy that had attracted criticism, and it means that the full impact of the policy will not be felt until the mid-2030s. But that long-run impact remains unchanged: ultimately the two-child limit will, among those families affected by it, reduce their incomes by an average of £3,000 per year. This remains a major reform to our benefits system.

Six years ago today, Child Benefit was first withdrawn from families containing someone whose annual income is above £50,000 a year. This threshold has since remained frozen in cash terms and there remain no plans to change it.

This presentation was given at a seminar at the London School of Economics on 19 November 2018.

This presentation was given at an IFS briefing following the Autumn Budget Statement 2018.

This presentation is one of a series on the economics of tax policy.

This presentation is one of a series on the economics of tax policy.

This presentation is one of a series on the economics of tax policy.

This presentation is one of a series on the economics of tax policy.

This presentation was given by David Phillips at the CIOT/IFS debate, "Tax devolution - a help or hindrance to the UK's cities, regions and nations?", on 22 October 2018.

This presentation is one of a series on the economics of tax policy.