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Progress on poverty 1997-2003/4

The Government has set the target of ending child poverty in a generation and reducing it by one-quarter by 2004. New research from the London School of Economics and Political Science (LSE) and Cambridge University gives the most detailed analysis to date of the progress so far towards these goals and the prospects of reaching the short-term target. 

The study, Poverty in Britain: the impact of government policy since 1997 by Holly Sutherland (Cambridge University), Tom Sefton and David Piachaud| (LSE), used the same definition of 'relative poverty' as that used by the Government: household income below 60 per cent of the median income level in that year. It found:

  • Between 1996/7 and 2000/1 relative poverty fell, largely as a result of improvements in employment rates and in the level of some benefits. Overall poverty fell by about one million, including about half a million fewer children in poverty
  • The effect of policy changes introduced between 1997 and 2003/4 would have been to reduce child poverty by about 1.3 million children, other things being equal.
  • Because incomes generally continue to rise, raising the relative poverty threshold, the actual reduction in child poverty is lower: there are likely to be about one million fewer children in poverty in 2003/4 than in 1997
  • Indirect taxes and duties have increased in real terms since 1997. This has affected poorer households disproportionately, because most indirect taxes are regressive. The effect of this (not included in official poverty statistics) would, however, be relatively small - equivalent to raising poverty between 1997 and 2002/3 by 0.4 percentage points.

The researchers conclude that the Government could just succeed in reaching its first milestone of reducing poverty by a quarter by 2004. However, achieving its longer-term targets for child poverty is likely to be more difficult and will require the Government to continue to give priority to poverty reduction.

Ends

  • To read a PDF of the report, click here
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  • To read press cuttings on the research, click here

Notes:

Poverty in Britain: the impact of government policy since 1997 by Holly Sutherland (Cambridge University), Tom Sefton and David Piachaud| (LSE), is published by the Joseph Rowntree Foundation.

The study was carried out by 

  • Holly Sutherland, director of the Microsimulation Unit, in the Department of Applied Economics at the University of Cambridge
  • Tom Sefton, research fellow at the ESRC Research Centre for Analysis of Social Exclusion (CASE) at the London School of Economics and Political Science
  • David Piachaud, professor of social administration at the London School of Economics and an Associate of CASE.

An interim report from the study was published in December 2002. Changing poverty post-1997, by David Piachaud and Holly Sutherland, is available as CASE paper 63 at http://sticerd.lse.ac.uk/case/publications| 

15 October 2003

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