Budget Submission 2005: Tackle lone parent Poverty in and out of work

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March 2005 Lone Parents have seen substantial improvements in their incomes in recent years with the risk of poverty for an individual in a one-parent family falling from 58% to 51% between 1999/2000 and 2002/03. [1] But the figures show that over half of individuals in one-parent families – around 2.5 million individuals including 1.7 million children – are still poor.

The Government repeatedly stress that work is the best route out of poverty, and improvements in the lone parent employment rate have helped to reduce the number of lone parents who are poor. But employment is not a sure route out of low income for lone parents; 15% of lone parents working full time, and 33% of those working part time, are still not earning enough to lift their children out of poverty.[2]

Child poverty can begin during pregnancy, and continue to scar during a child’s life. We have long urged the Government to introduce additional financial help during pregnancy to ensure that tackling child poverty begins at the very start of a child’s life.

We therefore recommend:

An increase in the level of the Child Tax Credit to ensure that it has been increased by £10 by 2010.[3] An increase in the maximum amount of Child Tax Credit must also be accompanied by an uprating of the income thresholds at which tax credits are withdrawn by earnings.
An increase in the National Minimum Wage to at least £5.50 with the aim of setting a National Minimum Wage rate pegged to two thirds of male median earnings. This again must be accompanied by an increase in the earnings threshold for Working Tax Credit.
That child benefit is extended to pregnant women.
That action is taken to ensure that all local authorities can provide school uniform grants. At present 42% of LEAs provide no help at all with the cost of school uniforms.[4]

[1] DWP (2004) Households Below Average Income 1994/95 – 2002/03.

[2] DWP (2004) ibid.

[3] This is in line with the recommendation of the Work and Pensions Select Committee, which stated in its recent report on child poverty that an additional £10 will need to be added to the Child Tax Credit in order for the 2010 poverty target to be met.

[4] Citizens Advice (2004) Help with school uniform costs: update Citizens Advice.

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