A CHARITY and trade union coalition hit out at government poverty policies yesterday, saying half a million children could be lifted out of poverty by reforming Universal Credit instead of raising the tax threshold to £12,500.

Ministers were told by the Trade Unions Congress (TUC) and Child Poverty Action Group (CPAG) to improve the benefit because its tax threshold proposal would cost the most and is least likely to reduce child poverty out of 13 possibilities.

The report comes days after an announcement by Work and Pensions Secretary Iain Duncan Smith that he would redefine child poverty, taking poor children with working parents off the list, regardless of how much money they actually live on.

But the TUC and CPAG said Universal Credit improvements, including increasing work allowances, would reduce poverty for 460,000 children.

TUC general secretary Frances O’Grady warned that Chancellor George Osborne “should look carefully at the most effectiveway” before making a final decision.

CPAG chief executive Alison Garnham said: “The Chancellor must be careful not to back the wrong horse when it comes to the government’s flagship policies.”