Taxes and Benefits: The Parties Plans

Tue,28 April 2015

Institute for Fiscal Studies Briefing Note BN172

This briefing examines the main proposed changes to income tax, mansion tax, other taxes, and benefits in turn, with a particular focus on Labour and the Conservatives. It then goes on to consider most of the specific tax and benefit policies of Labour, Conservatives and Liberal Democrats in detail.

The briefing finds that there are key areas of agreement between the main UK parties concerning:

  • Tax avoidance clampdowns
  • Extracting money from on very high incomes saving in a private pension
  • Avoiding increases to rates of income tax, NICs and VAT
  • Measures aimed at reducing the benefits bill – though the approach varies

There are also key difference including:

  • Increases in the personal allowance and an increase in the point at which higher rate tax becomes payable
  • A desire to impose a ‘mansion tax’
  • Large cuts in benefit spending and generosity.

The briefing concludes that

“..households can expect the tax and benefit changes implemented over the next parliament to reduce their incomes, on average. There are large differences between the Conservatives, Labour Party and Liberal Democrats in how they propose to do this. But they share a lack of willingness to be clear about the details, and an inability to resist the urge for piecemeal changes which make the overall system less efficient and coherent.”