Inequality by stealth: Tax allowances and social security in 2019/20

New Fabian Society analysis published to mark the start of the 2019/20 tax year shows how Conservative policies on tax allowances and social security have created a tax and benefit system that provides as much help to rich as poor households. Inequality by Stealth identifies how changes to tax and benefit policies since 2010 have contributed to Britain’s crisis of inequality.

The report finds that working couples now receive much more financial support from the government in tax allowances than the minimum social security available to non-working couples. In the 2019/20 tax year (starting on Saturday 6^th April) a couple who both work full time will benefit from tax-free allowances worth more than £7,000, while the minimum level of universal credit for a couple without work will be less than £6,000.

The report recommends:

1. Freeze tax-free allowances for 5 years to rescue social security
2. Create a permanent fiscal ‘envelope’ for tax-free allowances and social security combined
3. Consider a basic income instead of tax-free allowances but only alongside other options