According to one study, in terms of promoting social equality, the first Blair Government "turned out to be the most redistributive in decades; it ran Harold Wilson's 1960s' government close." From 1997 to 2005, for instance, all the benefits targeted on children through tax credits, Child Benefit and Income Support had gone up by 72% in real terms. Improvements were also made in financial support to pensioners, and by 2004 the poorest third of pensioners were £1,750 a year better off than under the system as it used to be. As a means of reducing energy costs and therefore the incidence of fuel poverty, a new programme of grants for cavity wall and loft insulation and for draught proofing was launched, with some 670,000 homes taking up the scheme. Various adjustments were also made in social welfare benefits. Families were allowed to earn a little more before housing benefit was cut, and the benefit was raised for families where the breadwinner worked part-time, while 2 million pensioners were offered automatic help with their council tax bills, worth £400 each, although many did not take advantage of this benefit. According to one study, the Blair Administration's record on benefits, taken in the round, was "unprecedented," with 3.7% real terms growth each year from 2002 to 2005.[13]
Under the years of the Blair Administration, expenditure on social services was increased, while various anti-poverty measures were introduced. From 2001 to 2005, public spending increased by an average of 4.8% in real terms, while spending on transport went up by 8.5% per annum, health by 8.2% per annum, and education by 5.4% per annum. Between 1997 and 2005, child poverty was more than halved in absolute terms as a result of measures such as the extension of maternity pay, increases in child benefit, and by the growth in the numbers of people in employment. During that same period, the number of pensioners living in poverty fell by over 75% in absolute terms as a result of initiatives such as the introduction of Winter Fuel Payments, the reduction of VAT on fuel, and the introduction of a Minimum Income Guarantee. To reduce poverty traps for those making the transition from welfare to work, a minimum wage was established, together with a Working Tax Credit and a Child Tax Credit. Together with various tax credit schemes to supplement low earnings, the Blair Government's policies significantly increased the earnings of the lowest income decile.[14] In addition, under the Working Time Regulations of 1998, British workers gained a statutory entitlement to paid holidays.[15]
Public expenditure on education, health, and social security rose more rapidly under the Blair government than it did under previous Labour governments, the latter due to initiatives such as the introduction of the Working Families Tax Credit and increases in pensions and child benefits. During the Blair Government's time in office, incomes for the bottom 10% of earners increased as a result of transfers through the social security system.[14]
New rights for workers were introduced such as extended parental rights, a significant raising of the maximum compensation figure for unfair dismissal, a restoration of the qualifying period for protection against unfair dismissal to 12 months, and the right to be accompanied by a trade union official during a disciplinary or grievance hearing, whether or not a trade union is recognised. In addition, an Employee Relation Act was passed which introduced for the first time the legal right of employees to trade union representation. In 2003, the Working Families Tax Credit was split into two benefits: a Working Tax Credit which was payable to all those in work, and a Child Tax Credit which was payable to all families with children, whether in work or not.[14] During Blair’s time in office, over 2 million people had been lifted out of poverty.