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Wednesday, September 1, 1999 Published at 12:44 GMT 13:44 UK


Labour 'will lift 2 million from poverty'

Many of the government's anti-poverty measures are aimed at parents

Almost two million people will be lifted out of poverty by the year 2002 because of New Labour policies, says a study.

But if poverty is to be reduced to pre-1979 levels there will have to be tougher measures to combat unemployment and more overt attempts to redistribute wealth, it argues.

The audit of Labour's anti-poverty policies, carried out by Professor David Piachaud of the London School of Economics, calculates that the number of people living on half the average income will fall from 14 to 12 million by 2002 when the next general election is expected to take place.

Prime minister Tony Blair said on election in 1997 that, if poverty were not reduced, the government would not deserve to be re-elected.

Gordon Brown

Professor Piachaud, whose study is published in next week's New Economy by the Institute for Public Policy Research, says Chancellor Gordon Brown is largely responsible for the fall.

[ image:  ]
He recently pledged to take one million children out of poverty by next year.

Professor Piachaud says putting the Treasury in charge of anti-poverty measures has made a significant impact and warns that progress could stall if Mr Brown is replaced by a Chancellor who takes a more "traditional" approach.

He calculates that increases in universal child benefit and the introduction of measures designed to target families on low wages, such as the Working Families Tax Credit and the Children's Tax Credit, will have the biggest effect on poverty.

He believes that, by the year 2002, these measures, announced in this year's Budget, will target an extra £4bn at families with children, taking 800,000 children and 550,000 parents out of poverty.

The introduction of a national minimum wage could affect 300,000 and reductions in unemployment, due mainly to the economic upturn, but also to welfare to work initiatives, could lift a further 500,000 out of poverty.


However, Professor Piachaud warns that the policy of a real terms freeze on benefits to households without children could add 300,000 to the poverty figures.

[ image: Gordon Brown: Stresses the need for anti-poverty measures]
Gordon Brown: Stresses the need for anti-poverty measures
And he says that, even with a fall of two million in numbers of people classified as poor, there will still be twice as many people living in poverty in the year 2002 as there were in 1979, when the Conservatives came into office.

He argues that the only way of making real inroads into this number is through further measures to tackle unemployment and a re-structuring of public expenditure to give greater priority to poverty reduction.

In an article in Wednesday's Guardian, he says most of the current anti-poverty measures are aimed at redistributing wealth "by stealth" and many, such as the abolition of the married couple's tax allowance, cannot be repeated.

He writes: "This redistribution is being pursued with an increasing role for means testing.

"This may appear attractive in the short term as a means of concentrating available resources on those in greatest need.

"But in the long term, it reduces incentives to work and to save."

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