Child poverty is driving UK apart, Gordon Brown warns ahead of Budget

The ex-Labour leader is set to claim that young people are being failed in Britain during a speech on Thursday.

He is also 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 is set to give the speech to mark on the 60th anniversary of the Child Poverty Action Group (Cpag).

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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, when 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."