The Chancellor scraped together almost £1 billion for low-paid families in a last-ditch attempt to meet Labour’s child poverty target by 2010.

A change to the rules on housing benefit and council tax benefit means that thousands more families will now qualify for extra help with their bills. In a surprise move, the Chancellor said that child benefit would no longer be taken into account when low-paid families apply for the two benefits.

Treasury officials calculate that the changes mean a household with one child and one parent working full-time on the minimum wage would be £17 a week better off from October 2009 when the changes come into effect. More than 100,000 families should benefit. The move may also act as an incentive to get unemployed parents back into work. Housing benefit falls away sharply when claimants move off jobseekers allowance and into employment and is often cited as a reason not to take up a job.

In a second move, Mr Darling brought forward by a year a planned big increase in child benefit from £18.10 to £20 a week for the first child. The increase will come into effect in April.

Rose-tinted specs fail to offer hope

The obvious justification for Mr Darling’s relatively upbeat scenario is that the outlook is fraught with uncertainty

Background

• Darling's first Budget: the main points

• The Chancellor's speech in full

• Darlings first Budget: the reaction

• Chancellor hits the home budget as his debts soar

• Need to know: Budget 2008

The Chancellor delivers a modest Budget

As so often is the case, virtue, in terms of improving public finances, is not now, but at least a year away

Multimedia

• Video sketch: Matthew Parris and Ann Treneman

• Eco-worrier: should we be pleased?

• Green Central: round-up of the green Budget measures

Multimedia

• Red Box: a list of Darling's new enemies

• The winners and losers

• Video: the 'fingers crossed' budget

A third change, an increase in tax credits in 2009 for families with children, will mean an extra £130 a year for many low-paid households.

The measures, which cost about £950 million altogether, came in a particularly tight Budget where there was little cash to spare. A further 250,000 children will be lifted out of poverty by 2010 as a result, on top of 300,000 who will be helped by measures announced in the 2007 Budget.

But the Government is still some way off meeting its goal. There are currently 2.8 million children living in poverty, down from 3.4 million when the target was set in 1999. The target for 2010 is 1.7 million. Campaigners welcomed the measures, saying that they showed ministers were determined to make progress.

“This is excellent news for Britain’s poorest children. It keeps the 2010 target to halve child poverty in reach,” said Kate Green, chief executive of Child Poverty Action Group. “It won’t take us all the way there, but today the intent is clear and a significant step forward has been taken.”

However, the Liberal Democrats said the investment was only a third of what was required to meet the target.

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