§ The Secretary of State for Work and Pensions (Mr. Andrew Smith)
Today I have published Households Below Average Income (HBAI) for 1994–95—2001–02. This is a report published under National Statistics arrangements with results that cover Great Britain. Copies have been placed in the Library.
The report shows that all incomes have been rising rapidly, but it is lower incomes that have been rising faster. Income growth has been at roughly double the long-term trend, but unlike comparable earlier periods like the late 1980s when the poor were left behind, the gains have been felt across the whole income distribution: rising prosperity for the many and not just the few. Whereas median real disposable income for the population as a whole had risen by 19 per cent. since 1996–97, median incomes for the poorest two-fifths were up by 25 per cent.
The reduction of child and pensioner poverty is a priority for this Government. There have been very significant falls in the numbers within both groups below "absolute" low-income thresholds.
In 1996–97 there were 4.3 million children in households with incomes below 60 per cent of the median (after housing costs income); by 2001–02 the number of children whose households fell below this same real income line was down by 1.8 million, a decline in this poverty count of 42 per cent. For pensioners below the same threshold, the decline is from 2.7 million in 1996–97 to 1.1 million in 2001–02, a decline of 1.6 million or 59 per cent.
We are not just increasing the incomes of poorer pensioners and children, we are doing so at a fast enough rate to help them to narrow the gap with the rest of the population. Before the late 1990s, there was a generation-long trend for relative income poverty amongst children to rise. The number of children below 60 per cent of contemporary disposable income more than doubled from 1979 to reach 4.3 million in 1996–97. The new figures confirm that this trend is now in reverse, with a fall of 100,000 in the number of children below this threshold this year. By 2001–02 there were half a million fewer children living in households below 60 per cent. of contemporary median (after housing costs) income than in 1996–97. For pensioners, the same relative poverty count fell from 2.7 million in 1996–97 to 2.2 million in 2001–02.