According to the members of the House of Commons Treasury Select Committee the abolition of the 10p tax rate threatens to put government targets on child poverty back even further.
It estimates that around 1.1 million households, many of which are families, will still be out of pocket despite government efforts to help the original 5.3 million households affected.
The government is already struggling to meet its target of halving child poverty by 2010, with latest figures for 2006 showing a rise of 100,000 children.
Committee chairman John McFall said: "The recent rise in both child and pensioner poverty demonstrates the need for concerted action by the government. This is why we have called for the establishment of a Poverty Commission which can take the lead in analysing the root causes of poverty in the UK, the scale of the problem and develop innovative ideas and approaches to make real and sustained progress on slashing poverty in the UK."
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