Child poverty biggest threat to UK’s long-term economic future – Gordon Brown

Child poverty across the UK is both the biggest cause of social division and biggest threat to the country’s long-term economic future, former prime minister Gordon Brown is expected to warn.

The ex-Labour leader is set to ramp up the pressure on Chancellor Rachel Reeves to raise taxes on gambling firms to cover the cost of lifting the two-child benefit cap.

Mr Brown, who has spoken out repeatedly on the issue of child poverty, will brand the issue a “shameful epidemic” in a speech on Thursday to mark the 60th anniversary of the Child Poverty Action Group (Cpag).

Speaking at an event in London, he is expected to say: “What has become a UK-wide child poverty emergency is not only the biggest cause of social division in our country but – because of the failure to equip young people for future work – it is also the biggest threat to our long-term economic future.”

The most recent official statistics showed there were 4.45 million children estimated to be in UK households in relative low income, after housing costs, in the year to March 2024 – the highest number since comparable records for the UK began in 2002/03.

A previously published report by the Institute for Public Policy Research (IPPR), backed by Mr Brown, suggested reforms to gambling levies could generate the £3.2 billion needed to scrap both the two-child limit and benefit cap.

The IPPR said axing the policies could lift half a million children out of poverty and “reverse years of rising hardship for low-income families”.

Polling for the campaign group 38 Degrees suggested almost two thirds (64%) of people support increasing taxes on gambling companies if the money was used to reduce child poverty, with 14% opposing such a proposal.

Mr Brown is expected to call for a “new coalition of compassion for children that will create a chain of hope for children right across our country”.

He will add: “This is urgently needed to take half a million children out of poverty from April next year and to meaningfully tackle Britain’s shameful epidemic of child poverty.”

Mr Brown is expected to call for the creation of a permanent UK-wide, all-party anti-poverty alliance of charities, foundations, businesses and faith groups to work with governments across the four nations to tackle rising child poverty.

It has been reported the Chancellor will make changes to the two-child benefit limit in her Budget.

In September, Ms Reeves said she was “determined to lift children out of poverty” and pointed to the child poverty taskforce, which is due to publish its strategy this autumn – having been delayed from spring – and said she will also “respond in the Budget”.

In that same month, asked directly about a report that she will make an announcement on the limit in her November statement, she did not deny such a move.

The two-child cap or limit – which is a separate policy to the benefit cap – was first announced in 2015 by the Conservatives and came into effect in 2017.

It restricts child tax credit and universal credit (UC) to the first two children in most households.

Campaigners argue that 109 children across the UK are pulled into poverty by the policy every day.

It has been reported the Treasury is looking at different options including whether additional benefits might be limited to three or four children, or whether there could be a taper rate meaning parents would receive the most benefits for their first child and less for subsequent children.

The Resolution Foundation think tank previously estimated that easing the two-child limit so families received support for the first three children they have would cost £2.4 billion in 2029/30 and would lift 280,000 children out of poverty.

The organisation said abolishing the two-child limit completely would be the most cost-effective way to reduce child poverty and that none of the previously rumoured options would be an “acceptable long-term solution”.

Estimates of scrapping the policy completely vary, with the Resolution Foundation estimating a cost of around £3.5 billion by the end of this Parliament (2029/30), while the Cpag and Joseph Rowntree Foundation have lower calculations of around £3 billion by then.

Cpag chief executive, Alison Garnham, said: “Now more than ever with child poverty at a record high, we need decisive action from Government and the first step must be full abolition of the two-child limit.

“Half-measures and compromises will not shift the dial. The policy must be removed in its entirety or a generation of children will grow up cut off from opportunity.”

A Government spokesperson said its strategy will set out how to “tackle the structural and root causes of child poverty”.

They added: “We are investing £500 million in children’s development through the rollout of Best Start Family Hubs, extending free school meals and ensuring the poorest don’t go hungry in the holidays through a new £1 billion crisis support package.”

– Survation, commissioned by 38 Degrees, polled more than 8,000 UK adults in August and September.