In Gordon Brown’s last budget as Chancellor he scrapped the 10p starting rate of taxation and this change came into effect for the 2008/9 tax year starting April 6th 2008. The move has been criticised by many Labour MPs and by poverty campaign groups as they argue that the scrapping of the rate will make some poor people worse off. They also argue that it will make it more difficult to meet the targets the government has set for reducing child poverty
Chancellor accused of widening poverty trap for poorer workers Times Online (14/03/08)
Benefit move to cut child poverty BBC News Online (12/03/08)
|Explain what is meant by the poverty trap.
|Explain how the abolition of the 10p starting rate of tax is likely to increase inequality.
|Analyse two policies that are likely to reduce poverty. Then assess the extent to which these policies will also help reduce child poverty.