Child poverty: Extra payments to families 'fail to go far enough'

Budget measures costing about £1bn will lift 250,000 more children out of poverty, said the Chancellor, Alistair Darling, but some Labour MPs warned that the package will mean the Government misses its target of halving child poverty by 2010.

The Chancellor announced that from April next year, a year earlier than had been planned, child benefit for the eldest child, which is paid to all parents regardless of income, will be increased to £20 a week. From October 2009, Child benefit will also be disregarded when calculating income for housing and council tax benefit.

Families with two children will also be £130 a year better off from improvements to the child element of the Child Tax Credit. Mr Darling said his Budget was aimed at "Ending child poverty, encouraging saving, raising ambition and providing greater opportunity".

Taken together, the Chancellor said the measures will lift a quarter of a million children out of poverty. But disappointed Labour MPs said the package did not go far enough.

A Labour member of the Work and Pensions Select Committee, Harry Cohen, said: "It was nowhere near enough. The select committee said they were one million children off-target for 2010 and they cannot meet that target on this basis. It is also very disappointing that the Chancellor has put off the housing benefit measures until 2009 because we warned that when housing costs are taken into account, Gordon Brown will be 1.5 million children wide of the mark."

John Mr McDonnell, the leader of the left-wing Labour MPs Campaign Group, accused Mr Darling of "admitting defeat" on child poverty. "We were all led to believe that the Chancellor would make a major announcement today to get the Government back on course to meet its target to halve child poverty by 2010," he said.

Nick Clegg, the Liberal Democrat leader, said Mr Darling's "piecemeal" reforms to the tax credit system would not get him "anywhere near" meeting the 2010 target. "The reality is that the Government's approach has failed. If we are to abolish child poverty for good we must not only increase income, we must increase opportunity too," he said. "These are the people most in need in our society – yet after 10 years and yet another Budget, they are still no nearer being given the true support they need."

The Prime Minister was warned at the weekend by a select committee that he was likely to miss his target for halving child poverty by more than one million children. But the Government appears not to be abandoning its target to abolish child poverty by 2020 and published a Budget report called "Ending child poverty – everybody's business", which reaffirms this goal.

Children's campaigners, however, were upbeat about the changes. Martin Narey, the chief executive of the chariry Barnardo's, said: "A lot more needs to be done and we will continue to put pressure on the Government ... but this is dramatically good news for children living in poverty."