Labour came to power in 1997, and were soon promising to cut child poverty by half - or another 1m children - by 2010 and eliminate it within a generation.

One in four children was in poverty in 1997/8, and more than one in five was still in poverty in 2003/4.

Tax credits are a key part of Chancellor Gordon Brown's efforts to tackle poverty and ensure that being in work pays more than staying on benefits. But critics say the system is too complex and open to error, such as overpayments which have to be repaid by struggling families.

The changes to the tax and benefits system are redistributive, but academics from the London School of Economics suggest the average level of inequality has barely changed since Labour came to power.

This is because earnings right at the top of the income scale have continued to grow much faster than average.