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Budget2000 Tuesday, 21 March, 2000, 19:32 GMT
Crusade to end child poverty
Chancellor Gordon Brown has said that too many children are still being born into poverty.

He announced a series of measures to boost low-income parents' finances and said the Trade Secretary would be looking at ways to improve family friendly employment.

Mothers will receive an increased maternity grant of 300 compared to 200.

It is the greatest reduction in child poverty in 50 years

Gordon Brown
But there is less help for middle class families, who will lose married couples allowance and mortgage tax relief in April, while they will only receive a new child tax credit from April 2001.

But there was a big increase in help for low-income working mothers.

Those who are receiving family credit will now receive support while they are on maternity leave.

That could mean a family with two children on 15,000 a year, could receive up to 2,200 each year in extra maternity benefits.

"This is what we mean by tackling child poverty and making work pay," he said.

He said that as result as his measures more than 1.2m children will be lifted out of poverty.

"It is the greatest reduction in child poverty in 50 years," Mr Brown said.

Child benefit will be 15.50 from April 2001 for the first child - a smaller rise than some anticipated, and little help for the middle class.

Redistributing cash

But the children's tax credit, which comes in next year, is to be raised by 50p a week, and the Working Families Tax Credit element for children by 4.35 per week.

John Whiting, tax partner at accountants PricewaterhoueCoopers, said that it was clear that the Chancellor was redistributing money to families with children, with single people and couples whose children have left home the main losers.

But he said the government had "missed a trick" but not moving forward the introduction of the child tax credit from April 2001 to this financial year to line up with the abolition of the married persons allowance.

Professor Julian Le Grand of the London School of Economics said, however, that by putting most of his spare cash into public spending on health, Mr Brown was trying to placate the middle class and that, overall, the budget was not redistributive.

Professsor Ruth Lister of Loughborough University, the former director of the Child Poverty Action Group, said she was worried by the small increase in child benefit and the shift to means-tested benefits for families with children.

'Welcome boost'

Mr Brown is also extending the New Deal measures to the adult unemployed and to lone parents, and he is planning to introduce an integrated child credit over the next three years.

Lone parents with children over five will be offered the choice of part-time work, training, or full-time work, with further help.

Lisa Harker, research director of the Institute for Public Policy Research, a think tank, said that the measures were a welcome boost to the income of low-income parents.

She said that while the government was taking a hard approach to adult unemployment, it recognised "quite rightly" that it was wrong to punish the children.

Benefits, she said, were to be more targeted on children, although she was disappointed by the low increase in child benefit.

But the most important announcement was the integrated child credit, she said.

That could ultimately mean that the value of children was recognised in the benefit system.

Under the integrated child credit system, all payments for children made to people who are on income support or working families tax credit would be consolidated in one payment that would be made to the mother.

Mr Brown said that by 2003, there would be a separate employment tax credit available to people without children as well, to help make work pay.

Network of voluntary groups

Mr Brown also announced an increase in support for voluntary organisations to help combat poverty, and the creation of a a network of local children's fund.

"The war against child poverty can only be won by the combined efforts of private, voluntary, charitable and public sectors working together, Mr Brown said.

A strong civic society is built by a strong shared concern," Mr Brown. "It is time for government to do more to promote civic reform."

He is making it easier for people to give to charities, and improving the situation regarding VAT for charities as well.

According to the Charities Aid Foundation, voluntary organisations could be up to 400m a year better off as a result of these changes.

Chancellor Gordon Brown
"We are determined to end child poverty"

See also:

10 Mar 00 | Budget2000
20 Mar 00 | Business
17 Mar 00 | Business
09 Nov 99 | UK Politics
21 Sep 99 | UK Politics
14 Jul 99 | UK Politics
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