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Labour 'failing working parents' Labour 'failing working parents'
(40 minutes later)
Government efforts to tackle child poverty have "forgotten" to help poor parents who work, a think tank says.Government efforts to tackle child poverty have "forgotten" to help poor parents who work, a think tank says.
The Institute for Public Policy Research (IPPR) says 1.4m children in Britain live in poverty despite having at least one working parent.The Institute for Public Policy Research (IPPR) says 1.4m children in Britain live in poverty despite having at least one working parent.
Since 1997 Labour has lifted 600,000 children out of poverty, but the number from working families has stayed the same, the IPPR says.Since 1997 Labour has lifted 600,000 children out of poverty, but the number from working families has stayed the same, the IPPR says.
In 1999, Labour vowed to eradicate child poverty altogether by 2020. The government insisted "significant progress" has been made under Labour.
In 1999, the government vowed to eradicate child poverty altogether by 2020.
The IPPR says the government is failing to reward those parents who get jobs in favour of those who do not work.The IPPR says the government is failing to reward those parents who get jobs in favour of those who do not work.
And its report says the benefits system offers little incentive for a second parent to get a job.And its report says the benefits system offers little incentive for a second parent to get a job.
Minimum wageMinimum wage
The think tank is suggesting several reforms to combat the problem of what it calls the "forgotten million", including: The most widely used definition of the poverty line is 60% of median income, the mid-point on the scale of national earnings.
The IPPR report was based on the example of a couple with one child aged under 11 earning £260 per week or less before housing costs or a couple with two children aged under 11 earning £303 per week or less before housing costs.
It is suggesting several reforms to combat the problem of what it calls the "forgotten million", including:
  • A new Personal Tax Credit Allowance to make it more attractive for both adults in a two-parent family to work. The second parent would be able to earn up to £100 a week before their tax credits are reduced, a move the IPPR says would make a family earning the minimum wage £36 a week better off.
  • A new Personal Tax Credit Allowance to make it more attractive for both adults in a two-parent family to work. The second parent would be able to earn up to £100 a week before their tax credits are reduced, a move the IPPR says would make a family earning the minimum wage £36 a week better off.
  • Raising the value of tax credits for couples by one third to £91.31 a week. The IPPR says this would benefit 1.6m families and lift 200,000 children out of poverty.
  • Raising the value of tax credits for couples by one third to £91.31 a week. The IPPR says this would benefit 1.6m families and lift 200,000 children out of poverty.
  • Increasing the minimum wage in line with average earnings growth, ensuring tougher enforcement of the minimum wage, and extending the adult rate to people aged 21 and under.
  • Increasing the minimum wage in line with average earnings growth, ensuring tougher enforcement of the minimum wage, and extending the adult rate to people aged 21 and under.
    • Work incentives
    Kate Stanley, head of social policy at the IPPR, said "significant progress" had been made since 1997, but the challenge now was "to ensure that work really is a route out of poverty".Kate Stanley, head of social policy at the IPPR, said "significant progress" had been made since 1997, but the challenge now was "to ensure that work really is a route out of poverty".
    "Tax credits and the minimum wage have 'made work pay' relative to being on benefits, but these don't yet go far enough to ensure more children are lifted out of poverty," Ms Stanley said. "Tax credits and the minimum wage have 'made work pay' relative to being on benefits, but these don't yet go far enough to ensure more children are lifted out of poverty," she said.
    "More action is needed to combine financial support and measures to boost parental employment with action to deliver fairness on pay and opportunities for progression at work.""More action is needed to combine financial support and measures to boost parental employment with action to deliver fairness on pay and opportunities for progression at work."
    One of the report's authors, Graeme Cooke, told BBC Radio Five Live that a fall in unemployment had not necessarily improved poverty. A Treasury spokesman said: "The government agrees work is the best route out of poverty, and this is a key part of its strategy."
    "Whilst there's a common perception that if you're in work then you're not poor, actually our research shows that's demonstrably not the case. He added: "Reforms to tax and benefits since 1997 have greatly improved work incentives and made work pay, and there are now 2.6 million more people in work and 600,000 children have been lifted out of poverty.
    "So half of all poor children now live in a household where at least one of their parents is out of work and that proportion is higher than it was a decade ago. "The government is committed to meeting its target of halving child poverty by 2010, and decisions on tax credits and financial support will be taken in the budget and pre-budget report in the usual way."
    "So while more people are in work than they were 10 years ago, still over half of all the poor children are living in a working household."
    In December, the Joseph Rowntree Foundation claimed the government's child poverty strategy had lost momentum and was in "urgent need" of a rethink.In December, the Joseph Rowntree Foundation claimed the government's child poverty strategy had lost momentum and was in "urgent need" of a rethink.