A study by the Institute for Fiscal Studies (IFS) found that whilst the income of the poorest tenth of society fell by 18 per cent in real terms between 1979 and 1992 (after housing costs), their expenditure rose by 14 per cent. In a separate report on changes in individuals' incomes over time, the IFS found significant movement in and out of the poorest sections of society between 1991 and 1992. The latest edition of Households Below Average Income showed that real net income rose by an average of 38 per cent (after housing costs) between 1979 and 1992/93, but fell by 17 per cent for the bottom tenth of the population (24:3/95,1.1). The narrowing of the gap in the north–south divide has halted, but a report on the geography of poverty explores many other divisions between and within areas of the UK. The report of the Commission headed by Lord Dahrendorf called for a new investment strategy and benefits structure, as well as measurement of social and environmental conditions as part of an annual audit of ‘wealth’. Tony Blair, the Labour Party leader, promised a fundamental review of the social security system once in power.

This comment examines proposals set out in this journal (Cuvillier, 1993) for taxing the imputed incomes of housewives in order to remove favourable treatment by the tax and benefit system which is an incentive to their remaining in the home. It briefly outlines Cuvillier's thesis and proposals and offers a critical assessment of the reforms she recommends. It finds that though the analysis of the problem is lucid and persuasive, the proposals are impracticable, unfair and largely irrelevant. It concludes that the distortions which affect women's choices about working outside the home are not implicit tax and benefit subsidies but obstacles: lack of affordable childcare and poverty traps in the tax and benefits systems.