This article examines the distributional impacts of changes to benefits, tax credits, pensions and direct taxes between the UK general elections of May 2010 and May 2015. The changes did not have a common effect on all household incomes; nor did the direct tax-benefit changes contribute to deficit reduction. Effectively, reductions in benefits and tax credits financed part of the direct taxes cuts, but the overall net fiscal cost increased pressure for cuts in other public services and increases in other (more regressive) taxes. The main gains were in the upper middle of the income distribution, and the main losers were at the bottom and those close to, but not at, the very top. Across most of the distribution the changes were regressive. By comparing with other analyses of policy changes in the same period, we illustrate the importance of analytical choices and assumptions for detailed conclusions on their distributional effects. We also show how some groups were clear losers or gained little on averageincluding lone parent families, large families and families with younger children. Others were gainers, including two-earner couples, and those in their fifties and early sixties. The findings show that a dominant feature of the period was that the combination of higher tax-free income tax allowances, financed by cuts in benefits and tax credits, was generally regressive. As this combination also lies at the heart of the proposed policies of the Conservative government since 2015, we would expect these effects to be intensified in the coming years.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractEach year, the Government decides how much to raise benefits and tax allowances. In the UK the basis for these upratings is rarely debated, yet has major long-term consequences for the relative living standards of different groups as well as for the public finances. This paper considers the medium term implications of present uprating policies which vary across parameters of the tax-benefit system. Continuing for 20 years, other things staying the same, would result in a near doubling of the child poverty rate alongside a substantial gain to the public finances. At the same time pensioners are largely protected by the earnings indexation of pensioner benefits and, in time, the basic state pension. We show how difficult it will be to meet the UK child poverty targets unless the greater inequality inherent in the current regime for uprating payments and allowances is redressed. JEL: D31, I381 We acknowledge financial support from the Joseph Rowntree Foundation and are grateful for useful advice and suggestions from the project Advisory Group members

The existence of income mobility may moderate concerns about growing inequalities, especially if income mobility has increased. However, the evidence for rising mobility is equivocal, and its extent is not enough to offset the growth of cross‐sectional inequality. There is a case for greater concern for, and different policies towards, those persistently or recurrently poor than those only temporarily poor, but the data analysed here suggest that the bulk of low income observations come from the first two categories. Analysis of income mobility may help understand why people's incomes follow different trajectories and how policy might affect this.

Describes and analyses one of the biggest social changes in Britain since the Second World War: the dramatic widening of the income distribution since the end of the 1970s, the growth of poverty, and the factors that have driven them. Examines how government intervention through social spending and the taxes that pay for it affect this distribution, and why they take the forms they do. Each part of the discussion is set in the context of public attitudes as revealed by the long-running British Social Attitudes survey. Analyses changes in policy since New Labour came to government in the UK in 1997, evidence on their impacts, and the constraints and pressures on future policies. Brings together new analysis carried out by the author and colleagues at the Centre for Analysis of Social Exclusion (CASE) at the London School of Economics. Includes material on income dynamics, the relationship between public and private welfare provision and finance, the distributional effect of government spending, public attitudes to inequality and social security, and the impact of recent reforms. Covers topics that are often analysed separately, such as income distribution, social spending, and taxation, but which are best understood together. Concludes with a discussion of the dilemmas facing policy-makers as they try to meet competing aims in terms of reducing poverty and inequality, growing demands on social spending, and the constraints and opportunities created by public attitudes. There are few easy ways out, but better public understanding of precisely that may be one of the crucial ingredients of any resolution.

List of figures, tables and boxes v Acknowledgements xi Notes on contributors xiii one Introduction I Kitty Stewartjom Sefton and John Hills Part One: Dimensions of policy and outcomes 19 two Poverty, inequality and redistribution 21 Tom Seftonjohn Hills and Holly Sutherland three 'A scar on the soul of Britain': child poverty and disadvantage under New Labour 47 Kitty Stewart four Education: New Labour's top priority 71 Ruth Lupton, Natalie Heath and Emma Salter five More equal working lives? An assessment of New Labour policies