Our first priority is to help the poorest pensioners, but our next priority is to help the millions of pensioners who have a little bit of money in the bank

Alistair Darling

But Social Security Secretary Alistair Darling launched a stout defence of the government's record, saying the figures failed to take in account extra help given to pensioners as part of the minimum income guarantee (MIG) and other measures.

Mr Darling also pointed to progress in other areas of poverty, including a fall of a quarter of a million in the number of children living in homes where no-one is in work.

General pension rise rejected

Speaking at the launch of the second annual report on poverty, Mr Darling said the goverbment was spending an extra �6.5bn, more than half of it on the poorest pensioners.

It's not the report's that out of date - it's the government that's out of touch

David Willetts

"The MIG is already helping 1.6 million pensioner-families and is now being backed up by a high-profile take-up campaign to make sure the extra help gets to those who need it most."

"Our first priority is to help the poorest pensioners but our next priority is to help the millions of pensioners who have a little bit of money in the bank," he said

But Mr Darling refused to bow to demands for an across the board increase in the state pension insisting that such a measure would mean giving the same increase to "Margaret Thatcher, who is now retired, as to those who really need it".

Some progress

And Mr Darling rounded on the Conservatives for failing to do enough to help pensioners when they were in power.

Older people feel stigmatised by benefits and know they have earned the right to a decent basic state pension

Help the Aged

Mr Darling said the annual report highlighted the steps taken and the progress made in the 12 months since the Government launched its programme to combat poverty.

This included initiatives resulting in a fall of a quarter of a million in the number of children living in homes where no-one is in work, one of the main sources of child poverty.

Mr Darling vowed that a total of 1.2m children would have been taken out of poverty by the end of this parliament.

He said: "These children are already benefiting from policies introduced by this government, such as the Working Families Tax Credit, the introduction of a national minimum wage and record rises in child benefit."

Out of touch

Mr Willetts criticised the social security secretary's defence: "Alistair Darling has been complaining the figures are out of date. It's not the report's that out of date - it's the government that's out of touch."

"We have been listening to pensioners and are offering them up to �10 a week. No handouts, no gimmicks, just a straightforward increase."

Liberal Democrat social security spokesman Professor Steve Webb advocated his party's new policy which he said would mean a pension rises of up to �15 a week for the oldest and poorest pensioners.

Difficult time

Help The Aged said the policy of targeting money at the poorest pensioners was not working: "Older people feel stigmatised by benefits and know they have earned the right to a decent basic state pension.

"The very poorest pensioners are always the least likely to claim the benefits that they are entitled too and freefall through the safety net," it said.

And the Child Poverty Action Group said child poverty had increased since Labour took power and accused the government of playing "pick and mix" with statistics.

The report comes at the end of a difficult few days for the government with a resulting slump in its popularity, according to a series of opinion polls.

Chancellor Gordon Brown has already faced repeated pressure to restore the link between pensions and earnings - scrapped by the Tories in 1980 - in an attempt to prevent the elderly slipping into poverty.

He will face the same call at Labour's conference which starts in Brighton next week.