Number of poor pensioners rises by 300,000

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The number of British pensioners and children living in poverty has risen by nearly 400,000 in a year, figures have revealed.

As Chancellor, Gordon Brown made tackling poverty a key objective. But yesterday's official statistics show that the number of pensioners living in relative poverty (defined as less than 60 per cent of median earnings before housing costs) has risen by 300,000 to 2.5 million, while the number of children in relative poverty rose to 2.9 million.

Experts warned that Labour was on course to miss its flagship target of halving child poverty by 2010. The Institute for Fiscal Studies said that even if the Government boosted child tax credits by £2.8bn a year, it would have only a 50-50 chance of meeting the goal.

The annual poverty figures were a personal setback for Mr Brown, who has already alienated many of Labour's working class supporters by abolishing the 10p rate of income tax.

In an echo of the row over 10p tax, some Labour MPs blamed Mr Brown's decisions as Chancellor for the first rise in pensioner poverty since the party came to power in 1997. Mike O'Brien, the Pensions minister, admitted that one of the "key explanations" was the decision in 2006 not to renew a £200 council tax rebate for the elderly. Other reasons were inflation outstripping benefits and economic growth, which left the poor less well off than the rich.

Although ministers admitted the figures were disappointing, they said 1.7 million more children would be in poverty without their measures, and that plans in the pipeline would reduce the number by 500,000 over the next few years.

Beverley Hughes, the Children's minister, said: "We know that meeting our... targets will not be easy, but we will not abandon any children to a future of poverty."

Gordon Lishman, the director general of Age Concern, said: "It is a national disgrace that pensioner poverty levels have begun to rise. The Government is failing those who need their help the most."

Fiona Weir, chief executive of the charity One Parent Families/Gingerbread said: "Poverty is a fact of life for far too many children in Britain today. Over 1.5 million children in one-parent families are now living below the poverty line."

Frank Field, Labour's former welfare reform minister, called for a rethink on Mr Brown's tax credit scheme. "Policy is ... in a cul-de-sac where more of the same won't necessarily lead to an advance. It's back to the drawing board," he said.

Chris Grayling, the shadow Work and Pensions Secretary, said: "Tackling child and pensioner poverty has been central to the Government's strategy and one where Gordon Brown has boasted... about the difference it is making. The truth is very different."