Perhaps this is the point when the government needs to reconsider its approach to the minimum income guarantee (Mig) and to the pensions system as a whole

Andy Allsopp of Age Concern

It appears to refute the claim by Labour at the election that it had lifted more than one million children out of income poverty. It is also way off the government's target of reducing by quarter the number of children living below the poverty line by 2004.

The report on low income households was delayed because of the election, and is one of the most accurate ways of reporting social deprivation, because it deals with a cross-section of the population and includes people who are not working.

Steve Webb MP, Liberal Democrat spokesman for Work and Pensions said: "These disappointing figures prove that two decades on from the Thatcher era, there is little substance behind Labour's rhetoric on reducing poverty and inequality."

The Department for Work and Pensions said that many of the policies aimed at poor people had not had a chance to make an impact. It said that next year's figures would illustrate the steps taken by the government were working.

The government is way off its target of reducing child poverty

Pensioners' plight

The report revealed that the numbers of pensioners living in poverty has decreased by 200,000 from 1998-1999, but one in four pensioners were still living in poverty in the year up to April 2000 or 2.4m.

However, the figures also reveal a slight rise in the number of pensioners who are suffering from persistently low incomes - or trapped in poverty.

Over half of pensioners experience relatively low incomes for at least one year out of every four, despite the fact that the government has introduced the Minimum Income Guarantee (Mig) aimed at lifting pensioners out of poverty.

Andy Allsopp of Age Concern said: "This clearly demonstrates that New Labour needs to get to grips with the problem. Perhaps this is the point when the government needs to reconsider its approach to the Minimum Income Guarantee (Mig) and to the pensions system as a whole."

Struggling alone

Lone parents are also experiencing continued difficulties.

Although in 1999-2000, there has been a 1% decrease in the numbers of parents below the poverty line, there are still 8% more than five years ago.

Just over 60% of people have incomes below the national average -the same as last year.

But, inequality across different groups has risen slightly on the previous year.

While the same percentage of people - 42% - are earning the top 20% of income as in 1998 to 1999, a larger number of people are now caught in the bottom 20% of income earned. This has increased from 7.5% to 7.6%.

Alissa Goodman of the Institute for Fiscal Studies said: "We knew before the election that for the third year of the parliament inequality fell back slightly, but it is still higher than when Labour came to power."