Living standards

In addition to having much-publicised targets for child poverty, the current government has also set itself the equally ambitious goal ‘to end pensioner poverty in our country’ .

There is a strong consensus that the British general election successes of the Labour Party in 1997 and 2001 owed much to attracting and retaining support from amongst the 'middle-class' voters of 'middle Britain'. But are the supposed residents of middle Britain in the middle of the income distribution? In this briefing note, we look at where we might find the 'middle classes' in the income distribution, and at the pattern of income distribution more generally.

We examine the effect on inequality of increasing one income, and show that for two wide classes of indices a benchmark income level or position exists, dividing upper from lower incomes, such that if a lower income is raised, inequality falls, and if an upper income is raised, inequality rises.

Child poverty in Britain fell in Labour's first term, though by much less than micro-simulation exercises suggested.

This commentary reviews the government's tax and benefit reforms affecting pensioners to date, and examines the evidence from the latest official low income figures on the government's record on pensioner poverty so far.

The child tax credit and working tax credit were introduced in April 2003. When fully operational, the child tax credit will represent the majority of government financial support for children. It is designed to simplify the system of financial support for parents, and provides support that is means-tested against family income. The working tax credit is designed to make work more financially attractive. It means that people with or without children in work and on a low income may receive extra help from the State. This Briefing Note looks at the changes that have been made and asks why the new tax credits have been introduced, how they work, the cost and distributional impact, the impact on work incentives and what levels of take-up we might expect.

This Briefing Note provides a brief analysis of changes to income inequality since the Labour government came to power in 1997. The most recent data from 2001-02 show that there has been little change in income inequality since 2000-01. An implication of this is that there has been little impact upon the slight upward trend in inequality that has been experienced over Labour's term in office.

This paper analyses the thrust of the UK Government's pension reforms in the context of the system they inherited.

Little is known about the wealth of older self-employed people, despite growing interest in this labour market group. This paper utilises the British Retirement Survey to fill the gap by providing novel estimates of their lifetime wealth.

An additional 100,000 children were lifted out of poverty on the most commonly cited of the government's relative poverty measures between 2000ְ1 and 2001ְ2. The most recent figures show 3.8 million children (roughly 30 per cent of all children) in Britain in households with income below 60 per cent of the median income after housing costs. Although this means that almost one in three children in Britain live in poverty on this definition, this is the lowest level recorded since 1991. Since the Labour government came to power, the total drop in the numbers in child poverty has been around 500,000.

Income inequality continued to rise under the first two years of Labour, and on the latest figures remains higher than before the present Government came to power. This briefing note sets out some basic facts about the distribution of income in Great Britain, and explains the reasons behind some of the main trends. Areas covered include the important changes which have occurred in the labour market, demographics and taxes and benefits.

Forthcoming

The paper looks at the effects of changing fuel tariffs on low-income households

The main measure of inflation in the UK is the retail price index (RPI). One way to think of the RPI is as a measure of the changing cost of buying a very large shopping basket containing all of the purchases of a typical UK household. There is, of course, no such thing as a typical household. As a result, inflation varies across the household population, and it would be remarkable if the RPI were a good measure of inflation for every household. This IFS commentary explores the issues surrounding the extent and the implications of differences in inflation rates between households.

Before the 2001 election the Treasury said that `tax and benefit reforms announced in this Parliament will lift over 1.2 million children out of relative poverty. But official figures released on 11 April show a smaller fall in child poverty, of only 0.5 million since 1996-97. This commentary attempts to explain the discrepancy.

This paper studies the paths from inequality in earnings to inequality in household consumption.