by Steve Schifferes BBC News Online economics reporter

Poverty in the UK has increased more dramatically than in many other major industrial countries.

New research into poverty measurement by Professor Lars Osberg shows that there has been a big increase in the "depth" of poverty in the UK as well as the number of people who are below the poverty line.

Professor Osberg told BBC News Online that the main reason for the increase was the sharp rise in the number of workless households, coupled with a decline in the level of benefit payments to the poor.

Poverty Intensity

UK Poverty rate 1974: 9% 1995: 13.2% UK Poverty gap 1974: -18% 1995: -26%

He said that it was essential that poverty reduction strategies did more to help the "poorest of the poor" and not just concentrated on people just below the poverty line - defined as 50% of median earnings.

The UK Government has set a target of reducing the number of children in poverty by half by the end of the decade.

But Professor Osberg said that focusing on the numbers in poverty - the poverty rate - could be misleading.

It was important also to focus on the depth of poverty, as measured by how far below the poverty line the poor actually fell, the relative poverty gap.

In the UK, for example, the numbers in poverty decreased between 1974 and l986 from 9% to 8.4%, but the relative poverty gap fell from average incomes of 18% below the poverty line to 28% - leading to an 40% increase in poverty intensity.

Workless households

By the same measure, poverty intensity in the UK more than doubled in the two decades between 1974 and 1995.

Data for later years is still being compiled.

The main reason for the increase was the big increase in workless households.

In 1974 just one household in twenty had no members in work, while in 1995 one non-pensioner household in five was out-of-work.

And by 1995 the workless households made up nearly 60% of the poor, double their proportion twenty years ago.

The state pension was linked to prices, not earnings, after 1974

The intensity of poverty was reinforced by the reduction in benefits, which hit workless households the hardest.

Professor Osberg says he supports Labour's plans to make work pay, and to help return more people to get jobs.

But, he adds, transfer payments from the government to the poor should also be increased.

He estimates that if just 10% of the increase of income of the richest 10% of the population (or 3% of their total income) had been transferred to the poor between 1979 and l995, then the number in poverty would have dropped from 13.2% to 8.1% and the total poverty intensity would have been cut in half.

In contrast to the UK, the USA has a higher poverty rate and a higher poverty intensity - but relatively little change over the past two decades.

Much more US poverty is concentrated among the working poor, who are often in and out of temporary jobs during each year.

International comparisons

And the relative poverty gap in the USA actually decreased in the period between 1974 and l997.

One reason may have been the Earned Income Tax Credit, which gives extra tax credits to people in low-paid work.

Meanwhile, poverty intensity also increased in what was once the model welfare state, Sweden, over the same period - despite the fact that the official poverty rate was virtually unchanged in that period.

Just as in the UK, big rises in the number of workless households led to a deeper level of poverty - although less than 10% of Swedish households had no working member, as compared to 20% in the UK.

Trends in Poverty: The UK in International Perspective, by Professor Lars Osberg, is published by the Institute for Economic and Social Research, Essex University.
Poverty intensity is calculated by multiplying the poverty rate by the relative poverty gap.