Figures reveal fall in poverty

Child and pensioner poverty have both fallen since 1997, according to figures published today.

The Department for Work and Pensions said that the number of children living in relative poverty fell by another 100,000 in the last year to 700,000 lower than 1997 in real terms.

Pensioner poverty is also down by 700,000 in real terms since 1997, with a fall of 300,000 in the last year alone.

The Government has set a target of halving child poverty in real terms by 2010 and eradicating it completely by 2020.

The figures are backed up by a report published today by independent think tank the Institute for Fiscal Studies, which suggests that while average incomes have been cut, poverty and inequality have been reduced. However, it suggests the Government will be disappointed with the small fall in child poverty in the last year.

Ministers have introduced initiatives such as targeted tax credits and schemes like Sure Start to target poverty and Work and Pensions Secretary Alan Johnson said the investment was making a “huge difference”.

He added: “So, we are making good progress both for pensioners and children – and we should shout from the rooftops about this – but I am also quite clear that there is much more to do to maintain this momentum”.

But Conservative shadow Work and Pensions Secretary David Willetts said the Government was failing to meet its child poverty target.

“Labour promised to reduce the number of children living in poverty by a quarter over six years. After five of those six years, they’re nowhere near meeting their own target. In fact, since the arrival of Gordon Brown’s tax credits, all progress has come to a halt,” he argued.

“Only last month, Gordon Brown was claiming to have lifted one million children out of poverty. Today, we see the true figure is barely half that.”

Help the Aged welcomed the figures on pensioner poverty, which it put down to the success of Pension Credit.

But it added: “Help the Aged congratulates the Government on this incremental reduction, but believes that a Citizen’s Pension, paid at a reasonable level on a residential basis, is the only way to achieve the dramatic change which our older population deserves.”

In its report, the Institute for Fiscal Studies says that average household incomes after tax and benefits fell by 0.2 per cent in real terms between 2002/03 and 2003/04, as a result of tax rises in the 2002 Budget.

It also finds that the incomes of poorer households in 2003/04 were boosted by the introduction of child tax credit and working tax credit, leading to an average rise of one per cent in the poorest fifth of households.

But it says the fall in child poverty was smaller than it expected “given the generosity of the child tax credit and other payments to families with children in 2003/04”.

Research author Jonathan Shaw said: “The Government will have been disappointed by the latest child poverty figures, which do not show the big drop that we and they were expecting. To meet the Government’s short-term target, the number of children in poverty will now have to fall by 300,000 before housing costs and 500,000 after housing costs in 2004/05.”