Chancellor Faces Last Chance to Fight Child Poverty in 'Final' Budget

|PIC1|This Wednesday's Budget will be, almost certainly, Gordon Brown's last chance, as Chancellor, to do anything about child poverty and the "couples' penalty", Christian charity CARE has said.

CARE is calling on Gordon Brown to make changes to tax credits to reduce the number of children in poverty living in two-parent families where one of their parents are in work and to reduce the tax credit penalty on couples living-together.

Child poverty

Since coming to power, the Government has made much of seeking to reduce child poverty through the tax credits system and has set itself the task of a 50% reduction by 2010, CARE explains.

Don Draper, CARE's fiscal policy consultant stated, "There are more children growing up in poverty in two-parent families than in lone-parent families and in the great majority of cases at least one parent is in work. For lone parents work is an escalator out of poverty. This is not the case for many two-parent families. Almost one and a half million children are trapped in poverty because of the way the tax credit system works.

"Unless this problem is tackled, it is unlikely that the 2010 child poverty target can be met. If the majority of children in poor "in-work" families could be taken out of poverty, this would make a major contribution to meeting the 2010 target. If they are left in poverty, it is unlikely that the target can be met."

Couples penalty

Because of tax credits couples can be much worse off financially living-apart and as a result many low-income couples find that they cannot afford to marry or even cohabit. This is damaging family life and increasing the number of children in poverty, CARE has said.

Daniel Boucher, CARE's director of parliamentary affairs said, "The Government's focus on children in poverty in single parent households has had the perverse effect of creating a fiscal incentive for parents to live separately. This is profoundly unfortunate given that social research demonstrates unequivocally that the best interests of the child are met in a two parent family environment.

"In pursuing their narrowly "material" child poverty targets, the government would sadly seem to have been blinded to the reality of social and relational poverty with all that this means for wellbeing. February's UNICEF report on Child Wellbeing helped to demonstrate how badly the government has allowed things to get things out of perspective. Reducing the couples' penalty would benefit many lone parents by reducing the disincentive to repartner."

CARE is calling on Chancellor Gordon Brown to use the opportunity of his last Budget to restructure the tax credits system so that it is better focussed on reducing child poverty in both single and two parent families.

It is also challenging the government to remove the disincentives in tax credits and benefits which discourage the formation of two parent families.