Next week's Budget should focus on eradicating child poverty
Rachel Reeves’ first Budget as Chancellor of the Exchequer places Labour at a crucial crossroads. The decisions made in this Budget are likely to shape the direction of the party and the country for many years to come.
It is clear that the Labour Party leadership has a significant choice to make: it can build on the momentum of our huge election win this year by implementing more inclusive, progressive policies that tackle inequality and poverty at their roots, or it can shy away from the bold changes needed to truly transform society.
Poverty is rising at pace and inequality is widening across the UK – it is over twenty years since the UK saw its last sustained fall in poverty, under the Blair government. Recent analysis from the Joseph Rowntree Foundation found that 3.8 million people experienced the most extreme form of poverty – destitution – in 2022. Shockingly, not only does this equate to a 61% increase since 2019, more than one million of those affected were in fact children. My Liverpool Riverside constituency now ranks the most deprived in the entire country, with 1 in 2 children living in poverty.
In its recent manifesto, Labour committed to developing an “ambitious strategy to reduce child poverty”, but we are yet to see any concrete action on this. It is promising that a ministerial taskforce has been specifically established to “look at all available levers across government” to help tackle child poverty, but there are increasing concerns among charities and organisations that not enough is being done in the immediate future.
Analysis conducted by the Child Poverty Action Group has highlighted that in the first 100 days since the government took office, 10,000 children have been pulled into poverty by the two-child limit. This serves as a reminder that hardship doesn't just stop and wait – the two-child limit is a cruel policy that not only keeps families in poverty but also holds people back from achieving their economic potential.
Alleviating child poverty must therefore be an immediate priority for this government, and failing to seize this realisation will result in the perpetuation of the same cycles of hardship and inequality that society has had to endure under the Tories’ austerity agenda for many years.
Evidence clearly shows that abolishing the two-child limit would be the most cost-effective measure in reducing the number of children living in poverty. Every day we delay in ending this harsh policy, more families are pushed into poverty, exacerbating inequality and worsening health outcomes for countless more children. Reducing child poverty can no longer remain a policy option; it is a moral obligation. Child poverty is a stain on our society, and we must endeavour to eliminate it. There is a real opportunity for this government to implement policies that would truly tackle inequality and help lift families out of poverty – it completely depends on whether our government is willing to commit to them.
For the first Labour government in fourteen years, this Budget should be focusing on building a society where every child has the chance to succeed, where families can thrive without the constant fear of financial insecurity, and where the economy works for everyone, not just a privileged few. This should be a Budget that finally puts people – especially the most vulnerable in our society – at the heart of its policy.
However, the speculation and policy rumours ahead of it do not stand us in good stead. This Budget is likely to fall short of the transformative policies we had hoped for, but importantly, this should not be the end in our fight for a fairer society for all. Public opinion is shifting – poverty plays strongly in the national consciousness, which should be creating a greater political imperative to act. We cannot keep ignoring this crisis. We need a renewed commitment to eradicating child poverty within a generation.
It is important to recognise that Labour’s next steps will determine whether it becomes the party of genuine social justice or simply maintains the status quo of the last fourteen years.
Next week’s Budget should be signalling Labour’s intentions of rebuilding trust with its voters: ultimately, its policies must be both pragmatic and bold if we want to break down the barriers to opportunity for our children and reverse the growing tide of entrenched poverty and inequality.
Kim Johnson is the Labour MP for Liverpool Riverside.
