Increase childcare funding to tackle poverty, Brown told

Gordon Brown will be warned today that he risks missing his target of halving poverty unless there is a massive increase in spending on child care for working families.

The warning comes in a report from the Commons Select Committee on Work and Pensions which found that the £1bn pumped into supporting families through tax credits in Gordon Brown's last Budget has failed to reduce the problem of child poverty.

The committee says there are still 2.8 million children living in poverty and recent data show this number is increasing. Current projections indicate that the Government will miss its 2010 target for halving child poverty.

The findings will be an embarrassment for the Prime Minister, who told Labour's spring conference in Birmingham at the weekend that poverty remained a "scar" on Britain.

It is also likely to increase pressure on his close ally, Alistair Darling, the Chancellor, to announce a further big increase in child support in his Budget in nine days' time.

The MPs' report also complains of a lack of affordable childcare facilities during the hours that parents are at work. Availability of child care is a particular problem in deprived areas, it says.

The gap between the incomes of those in work and those on benefits will also widen if benefits continue to be updated in line with inflation rather than earnings, says the committee, which challenges the Government's action to force the unemployed into work by threatening to cut their benefit entitlement.

Terry Rooney, the Labour chairman of the committee, said: "It is a deception to tell people that they are better off in work if this is not the case, and some jobs will be unsustainable when time-limited credit expires.

"The 'churn' of parents moving in and out of work can have a particularly damaging effect on children's well-being and their belief in the value of work." He said the Government needed "a long-term strategy on benefit income for those who are unable to work".

Chris Grayling, the shadow Secretary for Work and Pensions, said: "Despite all the rhetoric, despite all the billions the Government has spent, Britain's record under Gordon Brown on child poverty is one of the worst in Europe. It's now quite clear that ministers have no chance of hitting their child-poverty targets and it's time for urgent action to address what is a real blight on our society."

Harriet Harman, deputy leader of the Labour Party, promised the party conference yesterday that there would be a new Equality Bill to enforce equal pay for women.

"You can't have a modern economy and a confident society if it is marred by misogyny, homophobia and racism. Everyone in society must be able to play their part," she said.

"We will have a strong new Equality Bill because, though we have made progress, we are not satisfied and we need to do more." She also promised more cash support for carers, including many women who look after elderly parents, but who lose their weekly carer's allowance of £48.65 if their earnings are over £87 a week. "We weren't afraid of being called the nanny state. And we won't be afraid of being called the granny state," she said.

Alan Johnson, the Health Secretary, announced plans to enable elderly couples to remain together when one of them has to go into care.