Taxes and benefits

IFS Director Paul Johnson writes in The Times.

The autumn statement, business rates, and local government

The impact of funding cuts and business rates retention in the North: latest IFS research

These slides contain supplementary information to accompany the briefing on the outlook for living standards for the Autumn Statement 2016.

This presentation was given at an IFS briefing following the Autumn Statement 2016.

This presentation was given at an IFS briefing following the Autumn Statement 2016.

A lower cap on the total amount of benefits that households can receive comes into force tomorrow, affecting four times as many households as the previous benefit cap. Like the previous cap it will apply to out-of-work households of working age (with some exemptions, mainly due to disability). The cap will now be £23,000 a year in London and £20,000 elsewhere (there are lower caps for single adults without children set at £15,410 in London and £13,400 elsewhere). This compares to £26,000 nationwide under the previous cap, which has been in place since 2013. In this observation we look at the implications of a lower cap for government spending, the impact on the households affected, and how they might respond.

This presentation was given at fringe events at the 2016 Party Conferences of Labour, the Conservatives and SNP.

This morning the Office for National Statistics announced that inflation, as measured by the CPI, was 0.9% in the year to September. This is only slightly higher than the 0.6% the Office for Budget Responsibility forecast in the March Budget. But since then many forecasters – including the Bank of England – have revised up their forecasts for future inflation as the sharp drop in the value of the pound since the referendum is expected to push up prices. This observation focuses on one consequence that higher inflation would have: the fact that it would reduce the real incomes of working age families receiving benefits that the Government has frozen in cash terms through to March 2020.

This presentation was delivered at the Low Pay Commission Information Retreat in London on 5th October 2016.

Increasing incomes, increasing waistlines?

The results of the latest business rates revaluation reveal a growing divergence in property prices between London and the rest of the country. Increases in the value of non-residential property in the capital are set to raise rates bills by 11%, on average, increasing the tax take by over £700 million. This will be offset by reductions in bills and revenues in most of the rest of England, and especially the North, as property values fall behind. Growing differences in property prices reflect broader evidence of a growing divergence in economic performance over the last few years. And it will contribute to the ongoing trend of the UK government becoming more and more dependent on revenue from London to fund services across the whole – which may pose difficulties if more revenue sources are devolved to the local level. This observation discusses this and other issues related to today’s revaluation figures.

This presentation was given at a workshop on 'Microsimulation for fiscal policy analysis' held at the Joint Research Centre of the European Commission in Seville, Spain, on 23 September 2016.