Tax credits and the benefits system, which cost the equivalent of a 4p cut in the basic rate of tax, “brutally discriminate” against two-parent families, according to a report from a former Labour minister. Frank Field, who served as Minister for Welfare Reform, said that a single mother working 16 hours a week, after tax credits, gains a total income of £487 a week.

However, a two-parent family earning the minimum wage has to work 116 hours to gain the same income because the tax credits system does not make allowance for the second adult.

Mr Field said that this discrimination helped to explain why children in working two-parent families now made up the single most important group of poor children. He said that half of all poor children were in working families, despite attempts to help people to work their way out of poverty, and the number of children in poor working households was at the same level as in 1995.

His report, Welfare Isn’t Working, published by the Reform think-tank, also predicted that the Government will miss its target of halving child poverty by 2010-11. He noted that the Government missed the 2004-05 target — to cut the number of children in poverty by a quarter — and said that there had been no change in the numbers in severe poverty since 1997.

He gave a warning that the fall in the number of children in poverty would have to be eight times the rate it had been over the past five years for the Government to meet its 2010-11 target.

The study also said that in 2004-05 two parents with two children had to earn £240 a week to lift themselves above the poverty line. A single parent with two children had to earn £76.

However, campaigners denied that there was discrimination in favour of single parents. Chris Pond, the chief executive of One Parent Families, said: “It is adding insult to injury to suggest that lone parents, half of whose children are living in poverty, are receiving disproportionate support.”

He said that half of all children living with a lone parent were poor, and 41 per cent of single parents had a gross weekly household income of less than £200 compared with 8 per cent of married couples with children and 11 per cent of cohabiting families.

Kate Green, the chief executive of Child Poverty Action Group, said: “Children in loneparent families face a 50 per cent risk of being in poverty, compared to a 23 per cent risk for children in two-parent families.”

A Treasury spokesman claimed that Budget reforms would lift a further 200,000 children out of poverty by 2008-09. He said: “The Government has succeeded in arresting and reversing the long-term trend of rising child poverty, and remains committed to its target of halving child poverty by 2010-11.

“Since 1998-99 the Government has lifted 600,000 children out of poverty, around half of which have been from ‘couple’ families.”

Mr Field’s report calls for a government strategy to end discrimination against two-parent families, increase incentives to work for potential second earners, improve education success by the poorest children to prevent poverty passing down the generations and make the child-support system effective.

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