The government must help people with soaring rent in order to tackle child poverty, with tackling the cost of living central to reducing deprivation, Darren Jones has said.
Jones, now considered Sir Keir Starmer’s “right hand man” in his new position of Chief Secretary to the Prime Minister, said making food, housing and energy more affordable is key to reducing poverty.
In an interview with The i Paper he hinted ministers could unfreeze payments to help poorer families with rent prices as he said the “dysfunctional” rental market was piling financial pressure on families.
Jones said bringing down the cost of living was a crucial part of the government’s child poverty plan – which the Chancellor will flesh out in next week’s Budget.
How to deal with high rental costs
The amount of rent people pay is a key part of the cost-of-living challenge, he said. The i Paper reported this week that some of the poorest families who rely on welfare will still face financial hardship – even with more generous benefit allowances – because of the ongoing freeze to local housing allowance (LHA).
LHA is paid to those on universal credit who live in the private sector to help towards rental costs. Levels are automatically frozen unless the government intervenes to increase them in line with local rents.
The last time the payment was increased was in 2024 and current spending forecasts assume LHA will remain frozen in cash terms until at least 2029-30.
This means that families have to find the difference between the rent they must pay and the amount they receive in housing benefit. If rents rise each year, but the LHA remains frozen, the amount they must find increases annually.
Asked if this is something on the Government’s agenda, Jones said: “You need people to be able to afford secure housing now, which is why we often have to put up housing allowance because of what’s happening in the market, not just across the country, but in particular places.”
He added that measures like the new Renters Rights Bill – which introduces stronger protections for those living in the private market – improving access to social housing, and increasing the number of affordable homes being built are all part of a longer term plan to tackle this.
“But in the short term, you have to try to help people with the dysfunctional market pressures that they’re experiencing,” he added.
Recent research by the Institute for Fiscal Studies recommended LHA rates are regularly uprated in line with local rents, pointing out the inadequacy of rates are eating into disposable incomes for poorer households.
The Resolution Foundation think-tank concluded LHA rates set in 2024 have already fallen 14 per cent behind the increase in rental prices since then.
People in temporary accommodation in England. Provider: PA WireSenior research and policy analyst Hannah Aldridge told The i Paper: “The ongoing freeze to LHA has become a major drag on living standards for families facing rocketing private rents and threatens to undermine the Government’s efforts to reduce child poverty. Re-linking housing support to local rents will ease cost of living pressures for over a million families and help the Government towards its goal of reducing child poverty.”
High food and energy prices
Lifting the two-child benefit limit is expected to form a part of the final policy package, and hasn’t been ruled out as a Budget measure. But, outside of welfare changes, interventions to deal with high food, energy and housing costs are essential, Jones said.
“All of that is part of the cost of living issue,” Jones said. “The family is maybe struggling with housing, food and heating bills, which is what drives child poverty.”
This week, official data revealed a drop in overall inflation from 3.8 per cent to 3.6 per cent – but food inflation is still on the rise, meaning food prices are rising faster than the cost of some other essentials, adding to the pressure on households.
In addition, Ofgem announced on Friday the energy price cap will rise by 0.2 per cent from January – increasing household bills further.
“The fact that inflation is still so sticky on food and drink is a problem, even though the overall inflation is coming down, which is good,” Jones said.
Post-Brexit trade agreements signed off by this government will help, he added, claiming they would bring dow the higher import costs around fresh food being bought from EU countries.
But he would not be drawn on whether the government was looking at further VAT exemptions on energy or food bills, also thought to be on the cards in the Budget. Reeves is said to have been looking for some time at how VAT on energy bills could be cut, to ease pressures on families.
Wealthier parents pay higher child care costs
Jones’s interview with The i Paper took place at a social enterprise nursery in Newham, London, where the minister was discussing his newly-launched Office for the Impact Economy.
The London Early Years Foundation (LEYF) nursery he visited is designed so that it charges parents higher fees in wealthier areas in order to be able to lower them in deprived regions. It is this kind of model that Jones wants the new office to support across the country.
Dr June O’Sullivan, CEO of LEYF, said widespread investment in early years organisations like hers is crucial if the government is serious about improving children’s lives. The Office for the Impact Economy – which will facilitate philanthropic support with companies like this that can make use of it – “offers a real opportunity to back providers who are already proving what works,” she said.
And, for Jones, this work is personal. He has spoken publicly about growing up in poverty and the sacrifices his parents were forced to make to ensure he was fed. The sense that child poverty is “personal” is, he suggests, not an “uncommon” feeling for “Labour politicians”.
Gifted and talented
He believes he is where he is because of schemes like the “gifted and talented” programme that elevated children out of deprived areas, under the New Labour government. Jones wants the legacy of this current Labour government, to reinvigorate attempts to offer better opportunities to kids who have been missing out.
“There was a specific effort to open up opportunities to young people from backgrounds where that might not already have been the case,” he said, speaking about his own childhood.
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“The investment and the intervention in the school system to get people who were academically able, as I was, to have the opportunity to go to university and to think more widely helped me to achieve everything I’ve achieved today,” he explained.
“Under the New Labour government, we had an investment program for communities from areas of deprivation, including the estate I grew up on, and that’s had a huge impact.”
Policies like the Better Futures Fund, Pride of Place, and this new office he has set up are about building “long term investment in those communities,” he said. “So kids like me, from backgrounds like mine, irrespective of which politician might be in office, will be given the access to think about opportunities and things in their lives that they might not normally get the chance to”.
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