Tax changes do little for North, says report by Sheffield University academics

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Plans in the Budget to increase personal income tax allowances will benefit London and the south east more than the north, according to Sheffield University analysts.

Changes will also do nothing to solve pay inequality between the regions, say academics at the Sheffield Political Economy Research Institute.

Dr Craig Berry said workers in the northern regions and the south-west would benefit the least.

That’s because employees who already earn less than £10,000 would not benefit at all from increasing the allowance, he said.

On average 18.2 per cent of employees in northern regions earned less than the current personal allowance, compared with 14.9 per cent for London and the south east.

Yorkshire and the Humber was also less likely to benefit than most other regions, with almost 19 per cent of employees earning less than the current allowance.

Dr Berry’s report points to the limitations of tax exemptions to help low-paid workers, and calls instead for changes to the income tax system.

He said: “This policy has been consistently described as a measure to support low-paid workers, but does not benefit the lowest paid at all.”