Leading article: Give them some credit rather than condemnation

Any government that sets itself an unambiguous target deserves to be held to it. And any government that gives itself a target as ambitious as "eradicating child poverty within a generation" can expect to be hauled across the coals if it is not met. So yesterday's report from the Department for Work and Pensions, which admits the Government has fallen short of its interim target of reducing child poverty, should certainly cause a few alarm bells to sound in Westminster.

This report exposes some of the failings of Gordon Brown's tax credit system, the Government's primary instrument for alleviating poverty - for both children and adults - since 1997. Families with a disabled parent have been penalised because of the Chancellor's emphasis on welfare through work. Discrimination means they often cannot find jobs. And parents of severely disabled children suffer too under this regime. They often discover that caring for their offspring is a full-time job and that work is not a viable option. Lone parents with several children tend to come up against the same problem. There have also been technical problems with the tax-credit system. Last year, it was revealed that almost two million overpayments were made. On the other end of the scale, many poor families who are eligible to claim are discouraged by the fiendish complexity of the system.

The subtext to this report is the growing inequality in Britain. The gap between the incomes of the richest and poorest in our society is at its widest since the 1970s. If this trend continues, it will be ever more difficult for the Government to haul people out of poverty (a concept that has been measured relatively since the 1960s). All this should give pause for thought to the Government, and Mr Brown in particular, since he expects to inherit the New Labour crown when Tony Blair leaves office.

But none of this can obscure the achievements of the Government in eroding poverty levels since 1997. When Labour came to power, one in three children was growing up in poverty. Now hundreds of thousands have been given a better start in life. We can afford to be more relaxed about the Government missing this latest target because so much progress has already been made in the right direction. Around 2.4 million people have been lifted out of relative poverty since 1997, including one million pensioners. It is true that inequality in modern Britain is stark. But reducing the overall income gap is less important than reducing relative poverty levels. Thanks to a combination of Mr Brown's redistributive tax policies and Britain's growing economy, this is happening.

Yet celebration is premature. A substantial number of people remain mired in the most stubborn poverty, apparently beyond reach. Again this is a symptom of the fact that Mr Brown's anti-poverty policies have been so heavily geared towards helping the working poor. Very little has been done to target those who, for a variety of reasons, would rather live on benefits than work. This group, usually concentrated in sink estates and the inner cities, is characterised by educational failure and marital instability. It is plagued by drug and alcohol abuse. The children often end up engaging in antisocial behaviour and crime. Such social problems exist in all tiers of our society, not just among the poorest. But there is a clear link between these problems and entrenched welfare dependency. The Government must try harder to enable these people to play a full part in society.

New Labour deserves credit for boosting the incomes of those at the bottom end of our society. But that is only one part of the job. Poverty will never be eradicated unless the Government turns its full attention to Britain's increasingly entrenched underclass.