Child benefit to keep pace with inflation

Gordon Brown will increase child benefit every year in line with inflation as part of a major campaign to put children at the heart of Labour's second term.

The Chancellor's pledge will be at the centre of a cross-government review – the first into the lives of British children – aimed at making sure young people do not "fall through the net". Children will be at the forefront of ministers' thinking as they move towards the 2002 Spending Review and the Whitehall-wide policy audit will investigate what now needs to be done to further help poor children, teenagers who get pregnant and young people who turn to crime. A key priority for the Labour government's second term is to rescue this lost generation.

"In the first term we targeted a huge amount of extra resources at children," a senior Treasury source said. "A central priority of next year's spending review will be tackling child poverty and improving children's life chances.

"One of the major issues driving all our planning is children, particularly children living in poverty or children at risk."

When Labour came to office in 1997, the rate of child poverty in Britain was among the highest in the developed world. Now 1.2 million of those children have been lifted out of poverty.

Mr Brown's answer was a string of programmes – the New Deal to give families where nobody was working the chance to get a job and the national minimum wage to ensure work paid. The poorest workers were taxed at a rate of 10p in the pound and new tax credits to help families, like the Working Families Tax Credit, were brought in.

The poorest children were the recipients of money from programmes such as Sure Start, the Children's Fund, and Connexions.

Treasury boasts include claims that by this October, the guaranteed minimum income for families in work will be £235 per week. Child benefit will have increased from £10.50 to £15.50 a week by April next year.