Can the Labour Party eradicate child poverty?
Ending child poverty isn’t just the morally correct thing to do - it’s the economically and politically sensible option for Labour.
Children living in poverty is a bad thing - I think we can all agree on that. Even those on the right, including Suella Braverman - have argued that it is reprehensible that some families in the UK still have to choose between heating and food. In 2025, the moral case for this is abundantly clear. We do not need to read Charles Dickens to understand the despair and pain that poverty brings to families and children. George Orwell describes his experience of poverty in his memoir, Down and Out in Paris and London (1933):
“You thought it would be quite simple; it is extraordinarily complicated. You thought it would be terrible; it is merely squalid and boring.”
However, the moral case for ending child poverty is still weighed against economic and political reality. As if the sensible option is to prolong the suffering of families and children, because we must “make sure the numbers add up”, as the Chancellor Rachel Reeves has stated. But it doesn’t have to be like that. The case for ending child poverty in the UK is both economically rational and politically essential for the Labour Party.
What is poverty?
Simply put, poverty is a lack of cash. If a household’s income is below 60% of the median income, then it is deemed to be poor relative to other households. It is seen as the most appropriate measure of poverty as it reflects general living standards and uses that as a baseline to measure people’s ability to live comfortably.
According to Child Poverty Action Group (CPAG), there are 4.5 million children growing up in poverty today. Child poverty has increased rapidly since 2021, with CPAG predicting levels will rise to 4.8 million children by 2029.
Why does ending child poverty make sense?
Child poverty is not a necessary evil of a high functioning, capitalist economy. It’s a flaw in the free market, and something that governments have failed to address and even exacerbated through deliberate policy-making. Policies, such as the cap on Universal Credit and Child Tax Credit when families have more than 2 children, plunge households into unnecessary poverty when they are likely to be struggling already, all in the name of economic prudence. Families suffering from such policies are working families too - 59% of those affected by the 2 child benefit limit are actually in work.
This is clearly short term-ism. Policies that fail to address or worsen poverty may provide the government with some immediate cash, but it means children grow up poor, are more likely to get poor academic results at school, are more likely to become involved in crime, and are less likely to contribute positively to the economy and society. The outcome is a poverty trap, where people born into poverty are left behind. This increases the cost of the welfare state in the long run - all to save some cash in the here and now.
Not only does poverty increase the likelihood of children falling into a poverty trap, rising rates of child poverty creates a disincentive for families to have children because they cannot afford the associated costs. This means that we are sleepwalking into a society with a diminishing number of working age adults, and an increasingly older, more dependent population. More spending on social care, the NHS, and pensions could be catastrophic for an economy without enough working people.
What can the government do?
The Joseph Rowntree Foundation (JRF) offers two policies that would significantly reduce child poverty over the current parliament:
Axing the Two-Child Benefit Limit
As Dame Meg Hillier recently told a Labour Party conference fringe event, removing the 2 child benefit limit would take 350 000 children out of poverty immediately. It has been something that many MPs have called for, and would have both an immediate and lasting impact on reducing child poverty.
Introducing a Protected Minimum Floor to Universal Credit
Secondly, introducing a protected minimum floor for Universal Credit would help provide a basic safety net for all families to ensure that their household income does not go below a certain threshold. Currently, someone’s Universal Credit payments are subject to a benefits cap and are also subject to debt repayment deductions. If the two-child limit on Universal Credit and Child Tax Credit were to be removed on its own, many families would still not see the benefit of this policy because they would still be subject to a cap in the amount of benefits they receive, wiping out any potential uplift. Therefore, introducing this alongside the removal of the two-child benefit limit would maximise the impact of both policies.
Of course, these policies come at a cost. Removing the 2 child benefit cap is estimated to come at a cost of between £2bn and £3.6bn, and an extra £340 million per year for the Protected Minimum Floor. However, this could be easily raised through taxing wealth. A modest tax of 2% on individuals with assets over £10 million would only affect 0.04% of the population and would raise £24bn, many times over the cost of axing the two child benefit cap and providing a Protected Minimum Floor to Universal Credit. Such a tax has been called for by 28 leading economists, and is vastly supported by both the general public and the wealthy themselves.
Why is this imperative for Labour to get right?
The raison d’être of the Labour Party must be to eradicate poverty and improve living standards. If we do not aim for this, then it begs the question of who we really are and where our interests lie. Tim Leunig, economist and former advisor to Chancellors Sajid Javid and Rishi Sunak, has said in a recent interview: “We know that Tory governments put up child poverty… we don’t expect anything better of them. But we do expect something better of the Labour Party.” This expectation is both a blessing and a curse. The public expects the party to work in the interests of working people, helping them to live a better life by improving living standards. If Labour fails to do this, they will be severely punished at the ballot box.
Policies that work towards eradicating child poverty are considered ‘radical’ because they push against the status quo of the last 14 years. But they are realistic, feasible, and completely necessary for Labour. They will make a start in pulling us away from decades of failed Conservatism, austerity, and deepening poverty and inequality. This is the Labour Party’s mission. If we do not turn the tide and improve the livelihoods of poorer families, these families will turn against us. If families do not start to feel the benefits of a Labour government, they will become even less engaged in the political process, as it perpetuates the idea that no party acts in their interests. This opens the door for the radical far-right, and becomes a threat to our democracy.
Is it enough?
The two policies proposed by JRF alone will not eradicate child poverty. So in that sense, although it is a start, it won’t be enough. The Labour Party needs to plan for how they are going to get as close as possible to eradicating child poverty over the next Parliament and beyond. Moving away from ‘means-tested’ and ‘contributory’ welfare payments towards a more universal approach will be a start in boosting people’s incomes without decreasing incentives to work. A progressive wealth tax that aligns more closely with income tax would bring in billions of pounds for the government to fund such redistribution. We must be bold enough to put these on the agenda - because if not now, when?