Abstract:
The analysis presented in this paper considers the impact on poverty rates of the Labour government’s tax and benefit policy changes in combination with the introduction of the National Minimum Wage (NMW). It examines the contribution of the NMW to direct poverty reduction and to “making work pay”. It concludes that the main contribution made by the NMW to poverty reduction at the household level is probably through its role in underpinning the operation of in-work top-up benefits.