In this chapter, the discussion shifts from one of descriptive policy formation and design towards one of analysis of outcomes and a comparison of policy between the systems in 1979, 1997 and 2008. This chapter acts as a bridge between the earlier discussion and our model lifetime analysis in Chapters Eleven to Fourteen. We consider the aggregate empirical profiles of policy outcomes over time for the whole of Britain and then illustrate how these will inform our later model lifetime analysis.

Policy change and the generation of change

The previous two sections of this book have described how far British social, economic and political life have changed since the 1970s and how social policy has changed alongside these other aspects. This third part of the book analyses changing policy systems by comparing the income and tax packages available in three key years 1979, 1997 and 2008 using a lifetime perspective. We now have the description of policy change as it affects the different parts of the lifetime from Part Two and it is time to align the lifetime view of policy and take our analysis forward. In Part Three, there are three main areas that most concern us:

• • The incidence of taxes and benefits. How much is paid in tax and how much is received in benefits and how has this changed between 1979, 1997 and 2008?

• • The outcomes that arise from the different policy systems. How does the changing incidence of taxes and benefits alter incomes? Comparing outcomes means both considering how net and gross income change for each individual (and how this cumulated over their hypothetical lifetime) and comparing such incomes in a relative way – placing them in the contemporary income distribution. This approach to outcomes means that we can look at the changing levels and incidence of relative poverty and other points in the income distribution since the 1970s and place our hypothetical lifetimes in such contexts.

• • Inequality. Finally, we can then look at our low, median and higher earning families over the lifetime and see whether they are drifting further apart or not. Are the low-earning Lowes, the median-earning Meades and the highearnings Moores more or less unequal over time and what are the roles of taxes and benefits?