“Chauvinistic” debates on immigration are distracting ministers from tackling the child poverty “emergency”, the founder of the Big Issue has told Sky News.

Lord John Bird, a crossbench peer, said there is “no evidence” the government is trying to “stop the growth or the propagation” of generational poverty, and the best thing they can do is admit they “haven’t got this right” and change course.

It comes amid a delay to Labour’s child poverty strategy, which is looking at whether to lift the controversial two-child benefit cap, among other measures.

While not affiliated to any political party, Lord Bird warned Labour will not hold back the rise of Reform UK unless they get a grip on the issue – calling debates on immigration a “great distraction”.

“They’re largely there because of the problems in the country,” he said of Nigel Farage’s party.

“There’s a kind of rightward move in the country and a lot of that has to do with the way the immigration is going.

“It’s all about, in my opinion, chauvinism – and patriotism has become a new value. I am particularly concerned about that.”

Lord Bird is proposing an amendment to the Children’s Wellbeing and School’s Bill next month that would impose a statutory duty on the government to reduce child poverty in England.

Education minister Baroness Jacqui Smith has previously rejected the idea, saying targets “would not in themselves drive reductions in poverty”.

But according to analysis by the Big Issue, Scotland has seen a 12% drop in relative child poverty since passing legally binding targets in 2018, whereas England and Wales has seen a 15% rise.

Lord Bird’s amendment has the support of Labour peer Ruth Lister, the former director of the Child Poverty Action Group, who argues targets “galvanise” governments and local authorities into action.

Manifesto pledge at risk

Labour is under pressure as its manifesto promised an “ambitious strategy” to bring down child poverty, but the taskforce set up to deliver it after the general election missed its deadline in May.

The delay followed cost concerns around lifting the two-child benefit cap, which multiple charities and Labour MPs argue is the most immediate thing the government can do to help the record 4.5 million children living in poverty in the UK.

That figure is projected to rise to 4.8 million children by the end of this parliament without further action – putting the manifesto pledge in jeopardy.

The cap is likely to be a significant issued at Labour’s annual party conference kicking off this weekend, against the backdrop of a deputy leadership contest in which both contenders have pledged to make child poverty a priority.

Education Secretary Bridget Philipson, who is standing in the race and co-chairs the poverty taskforce, said this week that “everything is on the table, including removing the two-child limit”.

Work and Pensions Secretary Pat McFadden, who co-chairs the taskforce, has not ruled out an announcement by the prime minister at the conference, but stressed: “Everything has to be paid for, everything has to be budgeted.”

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Lord Bird said removing the two-child cap, estimated to cost £3.4bn a year, would alleviate an “emergency”.

However, he said a longer-term strategy was needed to prevent poverty, warning it is more entrenched now than during his own “terrible” childhood.

The 79-year-old was born in a Notting Hill slum to a poor Irish family in 1946, becoming homeless at age five and learning to read and write through the prison system as a teen.

Back then “no one was giving you a handout” whereas there is “institutional poverty now”, Lord Bird said, blaming recent governments for “trying to make the poor slightly a bit more comfortable” rather than “turning off the tap”.

‘Aim for the impossible’

He urged Labour to challenge the radicalism of Nye Bevan, the founder of the NHS, and “aim for the impossible” in eradicating child poverty, with investments in education and social development.

“There’s no evidence that the government is trying to stop the growth or the propagation from one generation to another of poverty,” he said.

“The cheapest but most efficient thing this government could do is stop pretending they’ve got it right, stop pretending they got the answers. The most important thing they could do is say, whatever we’re doing, it’s not working.”

Sir Keir Starmer is to announce a “Pride in Place” programme with funding for over 330 disadvantaged communities as part of a fightback against Reform UK.

The money will come alongside new powers for local groups to seize boarded-up shops, save derelict pubs and block gambling and vape stores on high streets, the government said.

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The plan aims to address the sense of isolation in deprived communities, which Labour insiders believe is feeding the rise of Reform UK.

A Labour source described the programme as “absolutely essential” and “transformative”.

They told Sky News: “Reform is trying to divide communities, Labour wants to empower them, and we are giving them the tools and resources to turn them around.”

The full list of places that will receive the cash boost, and how much they will get, will be confirmed by the prime minister on Thursday.

The money is part of the communities funding plan announced by Chancellor Rachel Reeves in her June spending review, which promised new investment for 350 deprived areas across the UK “to improve parks, youth facilities, swimming pools and libraries”.

The government said at the time these areas included the 75 places previously named in the Plan for Neighbourhoods, each of which will get £20m of funding over the next 10 years.

The Spending Review named another 20 “pilot neighbourhoods” in England to receive the same amount of funding, mainly in the north or the Midlands, as well as five other pilots across the rest of the UK.

Sir Keir is expected to announce the rest on Thursday.

Speaking ahead of that announcement, the new housing secretary, Steve Reed, said the money will allow local people to “decide how best to restore pride in their neighbourhoods, not us in Westminster”.

He added: “That’s what real patriotism looks like: building up our communities and choosing renewal over division.”

How will the funding work?

The funding will be allocated to neighbourhood boards made up of community leaders and stakeholders, who will work closely with local councils, it is understood.

They will be granted Community Right to Buy and Compulsory Purchase Powers, allowing them to buy assets like grassroots football clubs, seize derelict buildings and save local pubs, the government said.

Councils will also be given powers to block betting shops, vape stores and fake barbers.

The programme draws similarities with Tony Blair’s New Deal for Communities (NDC), a 10-year regeneration drive that targeted 39 of the most deprived neighbourhoods in England from 2001.

An independent evaluation found NDC partnerships delivered improvements across several indicators, including crime, education and health. The biggest change was how people felt about their neighbourhoods as places to live.

Each area had around £50m of investment under the former Labour prime minister’s programme, but these were geographically bigger than the ones the government is now targeting, it is understood.

The “Pride in Place” Programme has been informed by the work of the Independent Commission on Neighbourhoods (ICON), launched in September last year to review the state of England’s neighbourhoods.

ICON identified 613 “mission critical” neighbourhoods – those they said needed the most urgent attention to make progress on Sir Keir’s “missions” for government.

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The bulk of these were in post-industrial areas in northern England, though high need was also identified in the West Midlands and coastal towns such as Blackpool and Clacton – the latter being the seat of Reform UK leader Nigel Farage.

Many of the sites to be announced are expected to contain a mission-critical neighbourhood within them.

Baroness Hilary Armstrong, a former Labour minister and chair of ICON, said: “If residents start to see positive, tangible changes in their neighbourhoods, this should start to restore the public’s faith in the power of government to do good.”

It comes at a critical time for Sir Keir, who has faced questions over whether he can survive after spending most of his first year in office languishing behind Reform UK in the polls.

Labour MPs have been lobbying for the funding for some time, expressing concern that Number 10’s mission to grow the economy with big infrastructure investments will not directly benefit people in areas that look and feel “left behind”.

Luke Akehurst, the Labour MP for North Durham, told Sky News: “This is what Labour governments are all about – properly funding the areas of the county that most need help.”

A senior minister has said he is “confident” the prime minister’s top aide will stay in post despite calls for his resignation over a failure to declare hundreds of thousands of pounds in donations.

Pat McFadden, the work and pensions secretary, described Morgan McSweeney, Sir Keir Starmer’s chief of staff, as a “highly talented individual”, and suggested recent reports about him was the work of political opponents trying to discredit him.

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Mr McSweeney, who is seen as the mastermind behind Labour’s landslide election victory, is facing questions over the failure to declare more than £700,000 in donations to Labour Together, the thinktank that fuelled Sir Keir’s Labour leadership campaign in 2020.

The PM’s top aide led the think tank from 2017 to 2020. As a members’ association, Labour Together is required to report donations and loans to the Electoral Commission, the body that regulates election spending.

In 2021, the commission fined the think tank £14,250 for more than 20 breaches – prompting Mr McFadden to say: “All these issues had been looked into three or four years ago.”

However, the issue has been thrust into the spotlight after the Daily Mail reported that a lawyer for the Labour Party had advised Mr McSweeney to describe the undeclared £740,000 in donations as an “admin error”.

The Mail also reported records released by the independent Electoral Commission, which oversees elections and regulates political finance, show Mr McSweeney was told in November 2017 donations to Labour Together had to be declared but he still failed to do so.

Conservative frontbenchers have called for an investigation, but Labour minister Steve Reed told Sky News the Tories “are just raking over old stories to distract from the fact they’ve got many, many problems”.

Mr McFadden told Wilfred Frost on Sky News Breakfast: “I think Morgan is a highly talented individual.

“I’m not surprised the Tories are targeting someone like that. They’ll see him as a formidable opponent. After all, he’s someone who worked with me to help deliver the biggest Labour election victory for a long, long time. So I’m not surprised that his political opponents will use every weapon they can, to try and attack him.”

Asked whether he believed Mr McSweeney would stay in post, Mr McFadden said: “Yes, I do.

“I can see why the Tories want to make as much of this as they can, and they want you to be asking me and other Labour spokespeople about it. But the Electoral Commission… took action at the time and they issued a statement last night making clear that was the case.”

The Conservatives have called for an investigation into the donations received by Sir Keir’s leadership campaign, with party chair Kevin Hollinrake alleging the prime minister may have failed to declare “potentially thousands of pounds’ worth” of support from the thinktank.

Mr Hollinrake accused Mr McSweeney of “hiding a secret slush fund he used to install Keir Starmer as Labour leader” as he urged the Electoral Commission to call in the police.

Alex Burghart, the shadow chancellor of the Duchy of Lancaster, told Sky News he would be “pretty worried if I was Morgan McSweeney”.

Referring to the scandals over the resignations of Angela Rayner and Peter Mandelson – a close ally of Mr McSweeney – Mr Burghart said: “It seems that whenever the Labour Party announces they’ve got full confidence in someone, they have to resign a couple of days later.”

He accused the prime minister of not declaring to the parliamentary authorities the support he had received from the think tank for his leadership campaign.

“We have a register of interests… and there is no record of Keir Starmer ever having declared any support from Labour Together, despite the fact that everybody knows that it was set up in order to make him Labour leader,” he said.

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A spokeswoman for the Electoral Commission said the issue had been “thoroughly investigated” in 2021, and it had been “satisfied that the evidence proved beyond reasonable doubt that failures by the association occurred without reasonable excuse”.

She added: “Offences were determined and they were sanctioned accordingly.”

Sky News has approached Downing Street for a comment.