The IFS said its proposal would cost 1bn and would benefit the poorest 3.5 million UK families with children. But it warned that any increases to means-tested benefits and tax credits aimed at meeting the poverty reduction targets would need to take effect in April 2004 and ought to be in Chancellor Gordon Brown's pre-budget report this week.
The Government currently measures poverty by the number of children in households with less than 60 per cent of the median income after housing costs. Recent statistics show that 3.8 million - or 30 per cent - of children in the UK were living in poverty in 2001-02. However, the Government is due to announce a new measure of poverty by the end of the year.
Martin Barnes, director of the Child Poverty Action Group, said that while he did not doubt the Chancellor's commitment to reducing child poverty, the Government should produce its new definition as soon as possible. He added, 'We are in the slightly odd position that the Government has given a commitment to halve child poverty by 2010, but they have not decided what exactly they will be halving.'
In its briefing document, What do the Child Poverty Targets Mean for the Child Tax Credit?, the IFS argued, 'Continuing to target a poverty measure defined exclusively in terms of incomes risks skewing the policy response excessively towards tax credit and means-tested benefits changes, and away from improving public services for children that might have a greater impact on their well-being over the longer term.'
It added, 'For example, the extra spending needed for the Government to meet its target for 2004-05 would pay for the current Sure Start pro-gramme to be doubled in size.'
The IFS said reducing child poverty in 2004-05 to around half the current level, to 2 million, by increasing the per-child element of the child tax credit would cost 5.5bn, a quarter of the total currently spent on benefits and tax credits for families.
