The outgoing Bishop of Durham has taken a parting shot at the Treasury as he demanded a fundamental shift in national thinking to tackle poverty.

In his final parliamentary speech, the Right Reverend Paul Butler accused the Exchequer of taking short-term decisions that flew in the face of evidence from other Whitehall departments and those at the local level.

Mr Butler also renewed his call to scrap the two-child benefit cap and for the restoration of the UK’s aid-spending target of 0.7% of gross national income.

The Anglican cleric, who is retiring, gave his valedictory speech in the House of Lords as peers debated poverty reduction.

Mr Butler said: “There is no singular, simple solution to poverty reduction. It is a complex issue where there is not one switch that can be flicked for it to be solved.

“Neither will anything change if we optimistically sit back and simply hope the situation will improve.

“England currently has no child poverty strategy and there is no UK-wide one. We have no targets, no coherent cross-departmental collaboration.”

Stressing the need for a more collaborative approach across Whitehall he said: “There’s still far too much silo thinking going on.”

Mr Butler added: “Decisions made by the Treasury, too often on a short-term rather than long-term economic analysis, regularly fly in the face of the evidence presented by the other Government departments and those who work on a local level.

“There must be a fundamental shift in our national thinking.”

He added: “Poverty is complex and requires not only focusing on income levels but this holistic preventative approach. Stronger communities, better mental and physical health, improved family relationships all contribute to poverty reduction.”

Referring to the Government’s focus on employment to deal with the problem, Mr Butler said: “Low pay and insecure work continue to prevent families from being lifted out of poverty.

“Work is only a successful route out of poverty if it pays a real living wage as well as secure hours and working practices.”

Opening the debate, Big Issue founder Lord Bird argued the need to “dismantle” poverty rather than dealing with its outcomes, which he said impacted health, schools and the prison system at great cost.

While successive governments had said they wanted to defeat poverty, the independent crossbencher said: “Yet not one of them stopped and asked, ‘How do we reconfigure our governance? How do we reconfigure what we’re doing so that we can do a better job and turn the tap off, rather than using a tablespoon to take the water out of the bath?’.”

He added: “In my opinion, we need a ministry for poverty prevention.”

Responding to the debate, work and pensions minister Viscount Younger of Leckie said: “This Government does have a range of programmes that work across departmental boundaries to help people address the challenges they face so that they can take their first steps towards employment and better outcomes for themselves and their families.”

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He added: “A strong welfare system is at the heart of ensuring support for those who need it, and our commitment to maintaining a strong safety net is reflected in the £276 billion that we expect to spend through the welfare system in Great Britain this financial year.”

He went on: “There is a lot of work going on across Government and I do believe there is joined-up thinking.

“In addition to ministers meeting with their counterparts in other departments, officials regularly work with colleagues across Government to better understand the multi-dimensional nature of poverty and also to craft effective policy.”