Anti-poverty bid 'failing workers'

The number of youngsters in poverty despite having at least one working parent has stayed the same since 1997 at 1.4 million, the Institute of Public Policy Research (IPPR) has said.

It means the Government's much-vaunted progress in reducing child poverty has been almost exclusively to the benefit of families in which neither parent works.

Some 600,000 children have been raised above the official poverty line since Labour came to power but the Government is committed to helping all 2.8 million poor children out of poverty by 2020 - half of which have at least one parent with a job.

A report published by the IPPR warned there was little incentive in the benefits system for a second parent to enter work and enable this "forgotten million" to increase their prosperity.

The think-tank - which has close links with New Labour - urges a series of measures to help such working families at the bottom of the labour market, including:

The introduction of a personal tax credit allowance, so that second parents would be better off if they start a job.

The IPPR says boosting the working tax credit for couples with children by a third - to £91.31 - would lift 200,000 children out of poverty at a cost of £1.6 billion. It says this could be paid for by taking child tax credit off 2 million better off families and increasing the effectiveness of the minimum wage by raising it in line with average earnings, enforcing it more stringently and extending the adult rate to 21-year-olds.

Kate Stanley, the IPPR's head of social policy, said: "Significant progress has been made in the last 10 years in lifting nearly 600,000 children out of poverty.

"However, half of all poor children now live in households where someone is at work and the challenge is to ensure that work really is a route out of poverty."