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Published: April 2018

1

The cumulative impact of

tax and welfare reforms

Country-specific appendix:

Wales

Jonathan Portes, Aubergine Analysis and King’s

College London, and Howard Reed, Landman

Economics

http://www.equalityhumanrights.com/



2

© 2018 Equality and Human Rights Commission

First published March 2018

ISBN 978-1-84206-729-1

Equality and Human Rights Commission Research Report Series

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The cumulative impact of tax and welfare reforms: Wales country-specific appendix



3

Acknowledgements

Data from the Family Resources Survey, Living Cost and Food Survey and Labour

Force Survey are Crown Copyright and are provided by kind courtesy of the ESDS

Data Archive at the UK Data Service, University of Essex.





4

Introduction

This appendix shows versions of most of the graphical figures from the report ‘The

cumulative impact of tax and welfare reforms’. Most of the figures from the report

used data for the whole of Great Britain: this appendix presents equivalent figures

using data just for Wales. The only figures excluded are where the data in the main

report are already presented separately for England, Wales and Scotland. We have

also suppressed results where the sample size is too small for a reliable analysis to

be undertaken for Wales (e.g. the ethnicity breakdowns).

The chapter headings and figure headings are the same as those used in the main

report.





5

4 | Cumulative assessment of the impact

of reforms at the household level

Figure 4.1 Cash impact of reforms to taxes and transfer payments by

household net income decile and type of reform, 2021-22 tax year:

Wales

Source: Landman Economics tax-transfer model analysis using FRS pooled dataset

2012–13 to 2015–16 and LCF pooled dataset 2010 to 2015–16.

-£3,000

-£2,500

-£2,000

-£1,500

-£1,000

-£500

£0

£500

£1,000

£1,500

1 2 3 4 5 6 7 8 9 10

Ch

ange

in n

et

inco

me

(£

/ye

ar)

Income Decile (1=poorest, 10=richest)

Gross Incomes Indirect Taxes Income Tax and NICs

Universal Credit Benefits and Tax Credits Total





6

Figure 4. 2 Percentage impact of reforms to taxes and transfer payments by

household net income decile and type of reform, 2021-22 tax year:

Wales



-20%

-15%

-10%

-5%

0%

5%

10%

15%

1 2 3 4 5 6 7 8 9 10

Ch

ange

in n

et

inco

me

(%

)








7


household net income decile by Parliament of introduction, 2021-22

tax year: Wales



-£4,000

-£3,000

-£2,000

-£1,000

£0

£1,000

1 2 3 4 5 6 7 8 9 10

Ch

ange

in n

et

inco

me

(£

/ye

ar)


2010-15 2015-17 2017-22 Total





8


household ethnicity (broad classification) and type of reform, 2021-

22 tax year: Wales

Analysis not presented because FRS sample sizes too small for reliable results to be

calculated


household ethnicity (detailed classification) and type of reform,

2021-22 tax year: Wales


calculated





9

Figure 4.8 Cash impact of reforms to taxes and transfer payments by adult–

child household disability status and type of reform, 2021-22 tax

year: Wales


2012–13 to 2015–16.

-£8,000

-£6,000

-£4,000

-£2,000

£0

£2,000

No children No disabled child(ren) Disabled child(ren)

Ch

ange

in n

et

inco

me

(£

/ye

ar)

Core disabled adult(s)

Gross Incomes Income Tax and NICs Universal CreditBenefits and Tax Credits Total

-£8,000

-£6,000

-£4,000

-£2,000

£0

£2,000


Ch

ange

in n

et

inco

me

(£

/ye

ar)

Wider disabled adult(s)


-£8,000

-£6,000

-£4,000

-£2,000

£0

£2,000


Ch

ange

in n

et

inco

me

(£

/ye

ar)

No disabled adults






10


household disability score and type of reform, 2021-22 tax year: Wales


2012–13 to 2015–16.

-£3,000

-£2,500

-£2,000

-£1,500

-£1,000

-£500

£0

£500

£1,000

£1,500

£2,000

None 1 2 3 4 5 6 or more

Ch

ange

in n

et

inco

me

(£

/ye

ar)

Household disability 'score'

Gross Incomes Income Tax and NICs

Universal Credit Benefits and Tax Credits

Total





11

Figure 4.10 Cash impact of reforms to direct tax and transfer payments by

specific functional disability, 2021-22 tax year: Wales


2012–13 to 2015–16.

-£4,000

-£3,500

-£3,000

-£2,500

-£2,000

-£1,500

-£1,000

-£500

£0

£500

£1,000

Vis

ion

Hea

rin

g

Mo

bili

ty

Dex

teri

ty

Lear

nin

g

Mem

ory

Men

tal h

ealt

h

Stam

ina

etc.

Beh

avio

ura

l

Oth

er

Ave

rage

ch

ange

in a

nn

ual

ne

t in

com

e (

£)

Functional disability

Transfer payments Income Tax & NICs Gross income Total





12


household demographic type and type of reform, 2021-22 tax year:

Wales



-£5,000

-£4,000

-£3,000

-£2,000

-£1,000

£0

£1,000

£2,000

£3,000

Singleadult nochildren

Loneparent

Couple nochildren

Couplewith

childrenSingle

pensionerCouple

pensionerMBU nochildren

MBU withchildren

Ch

ange

in n

et

inco

me

(£

/ye

ar)

Household Type







13

Figure 4.12 Cash impact of reforms to taxes and transfer payments by number

of children in household and type of reform, 2021-22 tax year:

Wales



-£7,000

-£6,000

-£5,000

-£4,000

-£3,000

-£2,000

-£1,000

£0

£1,000

£2,000

£3,000

None 1 2 3 or more

Ch

ange

in n

et

inco

me

(£

/ye

ar)

Number of children in household







14

Figure 4.13 Cash impact of reforms to taxes and transfer payments by number

of children in household and Parliament of introduction, 2021-22

tax year: Wales



-£7,000

-£6,000

-£5,000

-£4,000

-£3,000

-£2,000

-£1,000

£0

£1,000

£2,000

£3,000

None 1 2 3 or more

Ch

ange

in n

et

inco

me

(£

/ye

ar)

Number of children in household

2010-15 2015-17 2017-22 total





15

Figure 4.14 Cash impact of reforms to taxes and transfer payments by average

age of adults in household and type of reform, 2021-22 tax year:

Wales



-£3,000

-£2,500

-£2,000

-£1,500

-£1,000

-£500

£0

£500

£1,000

£1,500

£2,000

18-24 25-34 35-44 45-54 55-64 65-74 75+

Ch

ange

in n

et

inco

me

(£

/ye

ar)

Average age of adults in the household







16

Figure 4.15 Cash impact of reforms to taxes and transfer payments by average

age of adults in household and Parliament of introduction, 2021-22

tax year: Wales



-£3,000

-£2,500

-£2,000

-£1,500

-£1,000

-£500

£0

£500

£1,000

£1,500

£2,000

18-24 25-34 35-44 45-54 55-64 65-74 75+

Ch

ange

in n

et

inco

me

(£

/ye

ar)

Average age of adults in household

2010-15 2015-17 2017-22 Total





17

5| Intersectional analysis of the

distributional impact of reforms by

household and individual characteristics

Figure 5.1 Overall cash impact of reforms to taxes and transfer payments by

household demographic type and income quintile, 2021-22 tax year:

Wales



-£6,000

-£5,000

-£4,000

-£3,000

-£2,000

-£1,000

£0

£1,000

£2,000

1 2 3 4 5

Ch

ange

in n

et

inco

me

(£

/ye

ar)

Income quintile

Single adult no children Lone parent Couple no childrenCouple with children Single pensioner Couple pensioner





18

Figure 5.2 Overall percentage impact of reforms to taxes and transfer

payments by household demographic type and income quintile,




-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

1 2 3 4 5

chan

ge in

ne

t in

com

e (

%)

Income quintile

Single adult no children Lone parent Couple no childrenCouple with children Single pensioner Couple pensioner





19


household disability status for lone-parent households, 2021-22 tax

year: Wales


2012–13 to 2015–16.

-£10,000

-£8,000

-£6,000

-£4,000

-£2,000

£0

£2,000

Core adult(s) +children w/out

disability

Core adult(s) +disabled

child(ren)

Wider adult(s)+ children

w/outdisability

Wider adult(s)+ disabledchild(ren)

No disabledadults +

children w/outdisability

No disabledadults +disabled

child(ren)

Ch

ange

in n

et

inco

me

(£

/ye

ar)

Household Type







20


household disability status for couple households with children,



2012–13 to 2015–16.

-£10,000

-£8,000

-£6,000

-£4,000

-£2,000

£0

£2,000

£4,000

Core adult(s) +children w/out

disability

Core adult(s) +disabled

child(ren)

Wider adult(s)+ children

w/outdisability

Wider adult(s)+ disabledchild(ren)

No disabledadults +

children w/outdisability

No disabledadults +disabled

child(ren)

Ch

ange

in n

et

inco

me

(£

/ye

ar)

Household Type







21


household disability score for various household demographic

types, 2021-22 tax year: Wales


calculated


gender and income decile, 2021-22 tax year: Wales


2012–13 to 2015–16.

-£2,000

-£1,500

-£1,000

-£500

£0

£500

£1,000

1 2 3 4 5 6 7 8 9 10 average

Ave

rage

ch

ange

in a

nn

ual

ne

t in

com

e (

£)

Income decile (1=poorest, 10=richest)

Men Women





22

Figure 5.7 Contribution of different types of reform to overall cash impact,

men by income decile, 2021-22 tax year: Wales


2012–13 to 2015–16.

-£3,000

-£2,500

-£2,000

-£1,500

-£1,000

-£500

£0

£500

£1,000

1 2 3 4 5 6 7 8 9 10 average

Ave

rage

ch

ange

in a

nn

ual

ne

t in

com

e (

£)







23

Figure 5.8 Contribution of different types of reform to overall cash impact,

women by income decile, 2021-22 tax year: Wales


2012–13 to 2015–16.

-£3,000

-£2,500

-£2,000

-£1,500

-£1,000

-£500

£0

£500

£1,000

1 2 3 4 5 6 7 8 9 10 average

Ave

rage

ch

ange

in a

nn

ual

ne

t in

com

e (

£)







24

Figure 5.9 Impact of Universal Credit being paid to the primary earner instead

of split 50/50 between both partners, men and women in couples by

household income decile, 2021-22 tax year: Wales


2012–13 to 2015–16.

-£4,000

-£3,000

-£2,000

-£1,000

£0

£1,000

£2,000

1 2 3 4 5 6 7 8 9 10

Ave

rage

ch

ange

in a

nn

ual

ne

t in

com

e (

£)


Men (50/50) Men (UC to primary earner) Women (50/50) Women (UC to primary earner)





25


gender and age group, 2021-22 tax year: Wales


2012–13 to 2015–16.

-£2,500

-£2,000

-£1,500

-£1,000

-£500

£0

£500

18-24 25-34 35-44 45-54 55-64 65-74 75+

Ave

rage

ch

ange

in a

nn

ual

ne

t in

com

e (

£)

Age group

Men Women





26

Figure 5.11. Contribution of different types of reform to overall cash impact,

men by age group, 2021-22 tax year: Wales


2012–13 to 2015–16.

-£2,500

-£2,000

-£1,500

-£1,000

-£500

£0

£500

£1,000

18-24 25-34 35-44 45-54 55-64 65-74 75+

Ave

rage

ch

ange

in a

nn

ual

ne

t in

com

e (

£)

Age group






27

Figure 5.12. Contribution of different types of reform to overall cash impact,

women by age group, 2021-22 tax year: Wales


2012–13 to 2015–16.

-£2,500

-£2,000

-£1,500

-£1,000

-£500

£0

£500

£1,000

18-24 25-34 35-44 45-54 55-64 65-74 75+

Ave

rage

ch

ange

in a

nn

ual

ne

t in

com

e (

£)

Age group






28

Figure 5.13 Impact of Universal Credit being paid to the primary earner instead

of split 50/50 between partners, men and women in couples by age,



2012–13 to 2015–16.

-£3,000

-£2,500

-£2,000

-£1,500

-£1,000

-£500

£0

£500

£1,000

18-24 25-34 35-44 45-54 55-64 65-74 75+

Ave

rage

ch

ange

in a

nn

ual

ne

t in

com

e (

£)


Men (50/50) Men (UC to primary earner) Women (50/50) Women (UC to primary earner)





29


gender, disability status and income tertile, 2021-22 tax year: Wales


2012–13 to 2015–16.

.

-£2,000

-£1,500

-£1,000

-£500

£0

£500

£1,000

lower middle upper

ave

rage

ch

ange

in n

et

inco

me

(£

/ye

ar)

Income tertile

men, core group men, non-disabled women, core group women, non-disabled





30

Figure 5.15 Cash impact of reforms to direct tax and transfer payments for

men by ethnicity and income tertile, 2021-22 tax year: Wales


calculated

Figure 5.16 Cash impact of reforms to direct tax and transfer payments for

women by ethnicity and income tertile, 2021-22 tax year: Wales


calculated

Figure 5.17 Overall cash impact of reforms to direct tax and transfer payments

by age group and individual disability ‘score’, 2021-22 tax year:

Wales


calculated


by disability, ethnicity and gender, 2021-22 tax year: Wales


calculated


by individual disability ‘score’ and income quintile, 2021-22 tax

year: Wales


calculated





31


by age group and household income quintile, 2021-22 tax year:

Wales


2012–13 to 2015–16.


by age group and ethnicity, 2021-22 tax year: Wales


calculated.

-£3,000

-£2,500

-£2,000

-£1,500

-£1,000

-£500

£0

£500

£1,000

£1,500

1 2 3 4 5

Ave

rage

ch

ange

in in

com

e (

£/y

ear

)

Income quintile (1=poorest, 5=richest)

18-24 25-34 35-44 45-54 55-64 65-74 75+





32

6 |Distributional impact of specific

reforms

Figure 6.2 Cash impact of specific policy reforms by household net income

decile, 2021-22 tax year: Wales


2012–13 to 2015–16.

-£1,200

-£1,000

-£800

-£600

-£400

-£200

£0

1 2 3 4 5 6 7 8 9 10

Ch

ange

in n

et

inco

me

(£

/ye

ar)


Post-2015 freeze DLA to PIP UC work allowance cuts 2 child limit Bedroom tax





33

Figure 6.3 Percentage impact of specific policy reforms by household net

income decile, 2021-22 tax year: Wales


2012–13 to 2015–16.

-6%

-5%

-4%

-3%

-2%

-1%

0%

1 2 3 4 5 6 7 8 9 10

Ch

ange

in n

et

inco

me

(%

)


Post-2015 freeze DLA to PIP UC work allowance cuts 2 child limit Bedroom tax





34

Figure 6.4 Cash impact of specific policy reforms by household ethnicity,



calculated

Figure 6.5 Cash impact of specific policy reforms by household disability

‘score’, 2021-22 tax year: Wales


2012–13 to 2015–16.

-£1,200

-£1,000

-£800

-£600

-£400

-£200

£0

None 1 2 3 4 5 6 or more

Ch

ange

in n

et

inco

me

(£

/ye

ar)

Household disability "score"

Post-2015 freeze DLA to PIP UC work allowance cuts

2 child limit Bedroom tax Scotland reforms





35

Figure 6.6 Cash impact of specific policy reforms by household demographic

composition, 2021-22 tax year: Wales


2012–13 to 2015–16.

-£1,200

-£1,000

-£800

-£600

-£400

-£200

£0

Singleadult nochildren

Loneparent

Couple nochildren

Couplewith

childrenSingle

pensionerCouple

pensionerMBU nochildren

MBU withchildren

Ch

ange

in n

et

inco

me

(£

/ye

ar)

Household type

Post-2015 freeze DLA to PIP UC work allowance cuts

2 child limit Bedroom tax Scotland reforms





36

Figure 6.7 Cash impact of specific policy reforms by number of children in

household, 2021-22 tax year: Wales


2012–13 to 2015–16.

-£2,500

-£2,000

-£1,500

-£1,000

-£500

£0

None 1 2 3 or more

chan

ge in

ne

t in

com

e (

£/y

ear

)

number of children

post-2015 freeze DLA to PIP UC work allowance cuts

2 child limit bedroom tax Scotland reforms





37

8 | Winners and losers from the reforms

Figure 8.1 Size distribution of gains and losses by household income decile,

Wales, 2021-22 tax year


2012–13 to 2015–16.

0%20%40%60%80%100%

1

2

3

4

5

6

7

8

9

10

Inco

me

de

cile

(1

=po

ore

st, 1

0=r

ich

est

)

Gaining >20% Gaining 10-20% Gaining 5-10% Gaining 0-5%

Losing 0-5% Losing 5-10% Losing 10-20% Losing >20%





38

Figure 8.2 Size distribution of winners and losers by household demographic

status, Wales, 2021-22 tax year


2012–13 to 2015–16.

Figure 8.3 Size distribution of winners and losers by number of children in

household, Wales, 2021-22 tax year


2012–13 to 2015–16.

0%20%40%60%80%100%

single adult no children

lone parent

couple no children

couple with children

single pensioner

couple pensioner

MBU no children

MBU with children

Ho

use

ho

ld d

em

ogr

aph

ic t

ype



0%20%40%60%80%100%

none

1

2

3 or more

Nu

mb

er

of

child

ren

in H

H







39

Figure 8.4 Size distribution of winners and losers by detailed household

ethnicity, Wales, 2021-22 tax year


calculated

Figure 8.5 Size distribution of winners and losers by household disability

‘score’, Wales, 2021/22 tax year


2012–13 to 2015–16.

0%10%20%30%40%50%60%70%80%90%100%

none

1

2

3

4

5

6 or more

Ho

use

ho

ld d

isab

ility

'sco

re'







40

9 | Impact of the reforms on work

incentives

Figure 9.1 Average annual percentage impact of reforms to direct taxes,

transfer payments and National Living Wage by employment status

of working-age households, 2021/22 tax year: Wales


2012–13 to 2015–16.

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

Singleadult, nochildren,

notworking

Singleadult, nochildren,working

Loneparent,

notworking

Loneparent, in

work

Couple,no

children,not

working

Couple,children,

notworking

Couple,no

children,1 earner

Couple,children,1 earner

Couple,no

children,2 earners

Couple,children,2 earners

Ch

ange

in n

et

inco

me

(%

)

household type by work status

Gross Incomes Income Tax and NICs Universal Credit Benefits and Tax Credits Total





41

Appendix B: Analysis of the distributional

impact of reforms by other protected

characteristics

Figure B.1 Cash impact of reforms to taxes and transfer payments by married

or cohabiting status and type of reform, 2021-22 tax year: Wales


2012–13 to 2015–16.

-£5,000

-£4,000

-£3,000

-£2,000

-£1,000

£0

£1,000

£2,000

£3,000

Married, nochildren

Cohab, nochildren

Married,children

Cohab,children

Married,couple

pensionerCohab, couple

pensioner

Ch

ange

in n

et

inco

me

(£

)

Married/cohabiting status

Gross Incomes Income Tax and NICs Universal Credit

Benefits and Tax Credits Total





42

Figure B.2 Cash impact of reforms to taxes and transfer payments by

maternity status and type of reform, 2021-22 tax year: Wales


2014–15 to 2015–16.

-£10,000

-£8,000

-£6,000

-£4,000

-£2,000

£0

£2,000

£4,000

Lone mother,youngest child under

1Lone mother,

youngest child over 1Couple, youngest

child under 1Couple, youngest

child over 1

Ch

ange

in n

et

inco

me

(£

)

Maternity status







43

Appendix C: Analysis of the impact of

using Rossi/RPI uprating from 2015–16 to

2021–22 in the baseline scenario

Figure C.1 Cash impact of reforms to taxes and transfer payments by

household income decile using Rossi/RPI uprating for the 2010–22

period, and comparison with total cash impact using default

uprating, 2021-22 tax year: Wales



-£3,500

-£3,000

-£2,500

-£2,000

-£1,500

-£1,000

-£500

£0

£500

£1,000

£1,500

1 2 3 4 5 6 7 8 9 10

Ch

ange

in n

et

inco

me

(£

/ye

ar)



Universal Credit Benefits and Tax Credits Total (RPI/Rossi)

Total (default)





44

Appendix D: Analysis of the impact of

varying assumptions on take-up rate of

Universal Credit

Figure D.1 Cash impact of the introduction of Universal Credit (marginal

effects of UC and total change in net income after all reforms) by

household income decile under three different assumptions

regarding the take-up rate for UC, 2021-22 tax year: Wales


2014-15 to 2015-16 and LCF pooled dataset 2010 to 2015-16.

-£4,000

-£3,000

-£2,000

-£1,000

£0

£1,000

£2,000

£3,000

1 2 3 4 5 6 7 8 9 10

Ch

ange

in n

et

inco

me

(£

/ye

ar)


UC impact (low take-up) UC impact (default) UC impact (high take-up)

total impact (low take-up) total impact (default) total impact (high take-up)





45

Appendix E: Distributional effects of

reforms using a measure of household

disability ‘score’ divided by household size

Figure E.1 Cash impact of reforms to taxes and transfer payments by

household disability score divided by size of household, 2021-22

tax year: Wales


2014–15 to 2015–16.

-£2,000

-£1,500

-£1,000

-£500

£0

£500

£1,000

£1,500

less than 1 1 to 2 2 to 3 3 to 4 more than 4

Ch

ange

in n

et

inco

me

(£

)

Disability 'score' / size of household


