Changing Poverty Post-1997

The paper analyses changes in poverty in Britain since 1997. A povertylevel of 60 percent of median equivalised income is used. The first partexamines the changes that occurred between 1996/7 and 2000/1 asshown by the Family Resources Survey, on which government estimatesof Households Below Average Income are based. There was a smallreduction in poverty overall and a larger proportionate fall in childpoverty. This fall was attributable in part to increased employment andin part to changes in benefits and tax credits which increased for some,particularly for families on low earnings with children, but fell relativeto median incomes for many of those without children and not inemployment. The second part assesses policy changes implemented orannounced for the period 2000/1 to 2003/4 by means of a microsimulationmodel, POLIMOD, using a sample from the FamilyResources Survey. The impact of policy changes is to reduce povertycompared to its prospects under previous policies. But, relative to apoverty level that rises in real terms in step with median incomes, futurereductions in poverty are likely to be small. In order to keep on tracktowards the goal of halving child poverty by 2010, further policymeasures will be required.[...]