Background: In 2005 in England, universal Bacillus Calmette–Guérin (BCG) vaccination of school-age children was replaced by targeted BCG vaccination of high-risk neonates. Aim: Estimate the impact of the 2005 change in BCG policy on tuberculosis (TB) incidence rates in England. Methods: We conducted an observational study by combining notifications from the Enhanced Tuberculosis Surveillance system, with demographic data from the Labour Force Survey to construct retrospective cohorts relevant to both the universal and targeted vaccination between 1 January 2000 and 31 December 2010. We then estimated incidence rates over a 5-year follow-up period and used regression modelling to estimate the impact of the change in policy on TB. Results: In the non-United Kingdom (UK) born, we found evidence for an association between a reduction in incidence rates and the change in BCG policy (school-age incidence rate ratio (IRR): 0.74; 95% credible interval (CrI): 0.61 to 0.88 and neonatal IRR: 0.62; 95%CrI: 0.44 to 0.88). We found some evidence that the change in policy was associated with an increase in incidence rates in the UK born school-age population (IRR: 1.08; 95%CrI: 0.97 to 1.19) and weaker evidence of an association with a reduction in incidence rates in UK born neonates (IRR: 0.96; 95%CrI: 0.82 to 1.14). Overall, we found that the change in policy was associated with directly preventing 385 (95%CrI: −105 to 881) cases. Conclusions: Withdrawing universal vaccination at school age and targeting vaccination towards high-risk neonates was associated with reduced incidence of TB. This was largely driven by reductions in the non-UK born with cases increasing in the UK born.