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

Authors: Mike Brewer , Alissa Goodman , Jonathan Shaw and Andrew Shephard
Date: 30 March 2005
Type: Press release,


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. Download full version

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