Gordon Brown’s Budget targets poverty among pensioners and children

Some 200,000 children and 600,000 pensioners will be taken out of poverty under measures outlined in the Budget, Gordon Brown said today.

The chancellor of the exchequer’s measures include raising child benefit and increasing tax-free allowances for families and older people.

Child benefit will increase from £17.45 for the first child to £20 by 2010 in three stages. Brown rejected campaigners’ calls for child benefit for second and subsequent children to be brought in line with that paid to the first child.

The tax-free allowance for families will increase from £22,000 to £24,250 by April 2009. For pensioners this will increase from £7,280 to £9,770 by 2011.

The pension credit, which supports those on lower incomes, will be raised from £114 to £130 per week by 2009-10.

Gordon Brown also announced that education spending would increase from £60bn to £74bn a year by 2010. This means spending will rise by 2.5 per cent in real terms over the 2008-11 spending review period, above the overall government-wide increase of 1.9 per cent, leaving less money for other services including social care.

Settlements for other services are likely to be announced during the summer.

Brown’s major general announcement was a cut in the basic rate of income tax from next April from 22p to 20p in the pound, though this is balanced by the scrapping of the 10p lower rate of tax.