In 2006-07 there were 2.9 million children in relative low-income poverty, a fall of 600,000 children from 1998-99. Measures announced in and since Budget 2007 will lift around a further 500,000 children out of relative poverty.
The Government have pursued a comprehensive strategy to support families on lowest incomes:
introduced the national minimum wage in 1999, which has been increased by 24 per cent in real terms since then;
introduced working tax credit in 2003, the first system of inwork support for families without children;
rising support for families with children through tax credits meaning that four out of 10 families with children now receive more in tax credits and child benefit than they pay in income tax;
by April 2009 child benefit and the child tax credit guarantee support for the first child of £3,820 a year for families with an income of less than £16,040 a year;
introduction of a child benefit disregard in housing benefit (HB) and council tax benefit (CTB) by October 2009 will make HB and CTB more generous for low-income families with children (benefiting a working family with one child by up to £17 per week, and more for larger families); and
introduction of pension credit in 2003 means that no single pensioner has to get by on less than £130 a week, compared to £69 in 1997.
As a result of direct tax and benefit measures introduced since 1997, by April 2009-10, in real terms, households in the poorest fifth of the population are on average £2,850 a year better off; families with children in the poorest fifth of population are on average £4,750 a year better off. Between 1998-99 and 2006-07 relative child poverty fell by 600,000 children, and measures announced in and since Budget 2007 will lift around 500,000 more children out of relative poverty.