Press Release

Tax rises and new tax credits cut average incomes, but reduce poverty and inequality

Date: 30 March 2005
Gordon Brown's tax-raising 2002 Budget saw average take-home incomes fall in real terms in 2003/04, the first annual drop since the recession of the early 1990s. New and more generous tax credits helped nudge inequality down for a third successive year, but child poverty did not fall sharply as expected Ö suggesting that the government is now more likely than not to miss one of its child poverty targets for 2004/05.

These are some of key findings in Poverty and Inequality in Britain: 2005, an analysis by researchers at the Institute for Fiscal Studies of the latest annual Households Below Average Income data released this morning by the Department for Work and Pensions.