John McDonnell will pledge on Wednesday to end in-work poverty in just five years in one of the most significant pledges yet made by the UK’s opposition Labour party.
The shadow chancellor intends to argue that “the problem of our times” — people living in poverty despite being in work — can be ended in a single parliament through a variety of interventions such as establishing regional public banks and putting workers on company boards.
About 14m people in Britain are characterised as living in poverty, of whom 8m live in families where at least one person is in work, according to the Joseph Rowntree Foundation (JRF), a think-tank.
The shadow chancellor will address the launch of the annual Living Standards Audit by the Resolution Foundation, an independent think-tank that focuses on low pay.
His comments come with Labour in the spotlight because of its internal splits over Brexit and allegations about the failure of its leadership to stamp out anti-Semitism among party members.
While those rows have exposed deep splits within the party, Labour is still polling roughly neck-and-neck with the Conservative party according to the broad trend of recent opinion polls.
With British politics in a state of acute flux, there is increasing interest from business leaders about Labour’s policy proposals.
Mr McDonnell will argue that Labour could tackle in-work poverty through structural changes to the economy. Those changes, which are already party policy, include a stronger industrial strategy, a network of regional public banks, stronger trade union rights, a £10-an-hour “real living wage” and workers on boards.
He will also highlight various improvements to public services under a Labour government that would be funded by higher taxes on companies and the wealthy, including free school meals, free buses for young people, and more funding for libraries, parks and leisure centres.
A stronger “social safety net” would help low-income workers, he will argue, for example by stopping the rollout of universal credit and a review of the overall social security system.
Mr McDonnell will quote the JRF which said last year that in-work poverty was “the problem of our times”, and vow to end “this modern-day scourge”.
He will say that he rejects the concept that poverty is “OK” as long as some people are given the opportunity to “climb out of it”.
“I reject that completely, and want to see a society with higher living standards for everyone as well as one in which nobody lacks the means to survive or has to choose between life’s essentials,” he will say.
According to JRF, two-thirds of children in poverty live in a working family. Labour in June announced plans for a new Social Justice Commission to replace the existing Social Mobility Commission. It would have a new minister for social justice based in the Treasury.