s certainly as the moon pulls on the tides, Labour governments improve the lives of the poorest children. Just as surely, Conservative governments pull back and reverse the good done. Here we go again: despite the social devastation caused by George Osborne's cuts last time, Kemi Badenoch announces that she wants to impose cuts to universal credit for the poorest if she gets the chance.

She doesn't do subtle, none of Iain Duncan Smith's cruel-to-be-kind routine, but goes straight for populist rabble-rousing, stirring up fact-free contempt for anyone on benefits, with a proposed ban on buying cigarettes and alcohol, or gambling, with benefit money. Welfare, she says, must not be "a lifestyle choice for those who can't be bothered". As with all crude rightwing populism, the harm she does spreads hatred of the weak. In this most unequal country, it encourages bullies to kick downwards, stifling more generous human instincts.

Here's how the pendulum swings: New Labour lifted nearly a million children out of poverty and set up 3,500 Sure Start centres, which supported families from birth. David Cameron and Osborne swept all that away with billions of pounds in benefit cuts directed at families, tipping more children into food-bank poverty.

Naturally, this Labour government has swung the pendulum back, taking 450,000 children from destitution by removing the Tory two-child benefit cap – albeit with too much delay. For the first time ever, the universal credit standard allowance will permanently rise above inflation, with free breakfast clubs for all primary schoolchildren in England, half a million more children eligible for free school meals in England, cheaper school uniforms and Best Start family hubs opening.

But Labour has been bequeathed the worst fallout from 14 Tory years. The nearly 1 million Neets – young people not in education, employment or training – are a legacy of Tory rule. Labour has made turning the tide on those aged 18 to 24 its flagship goal, hoping that numbers fall fast by the next election. Can it be done?

The man who says it can is most in demand at meetings around the Labour conference next week. Alan Milburn's encyclopaedic report on the problem revealed the myriad reasons why so many of the young get left in limbo.

Next month, before the budget, he will publish the plan for what's to be done. I hear intense negotiations are in progress, down to the wire because this is in effect a white paper, not a report to gather dust but one ready to be implemented at once, with costings pre-agreed with PM, chancellor and relevant ministers. Milburn knows the system, and he is determined to short-circuit any blockers.

Here's the problem. His diagnosis points to everything from inequality and profound deprivation to mental illness, failures of the education system, refusal of employers to offer first breaks, falling apprenticeships, lack of early support in areas where many families are in trouble, and declining youth services. Neets are the fallout from deep social dysfunction, accelerated by the cuts.

Which will be the first priorities? It has been good to see Lucy Powell, the education secretary, start right away on new vocational GCSEs, which Milburn thinks will keep pupils engaged instead of dropping out. Copying the Dutch system of intensive one-to-one personal support will get Neets into training or work. That needs upfront investment from the new chancellor, John Healey, who is said to agree, even though he knows the results take time. The quid pro quo expected from Neets is a "duty to engage", so they must take part in the help offered, as all benefits are always conditional, with penalties as a backstop. Milburn's research defies Badenoch's kneejerk nastiness, as he finds 84% of Neets want urgent help into work.

Success will be judged by falling numbers of Neets, but there is the "stock and flow" question: preventing more from joining tomorrow's list starts at the very earliest years. Children who are not school-ready at ages four to five are nearly three times as likely to be Neet at ages 16 to 17, as Milburn said in the report. That's not certain destiny, but it is a high risk.

The good news is that Milburn will reset the nursery system that currently discriminates against the poorest. He tells me he is shocked that only 68% of children are school-ready, even after they have had a year in reception at primary school. He tells me he will be announcing a new target of 90% to reach that level by five years old: all research shows how investment at the earliest age yields most.

What would that take? The nursery system inherited from the Tories deliberately holds back the most deprived children by denying funded nursery hours in England to most children with a non-working parent. Here was Tory thinking: both parents must work to stop lazy mothers idling in nail bars while the state acts as childminder. But deprived children with non-working parents need nursery education to close the growing gap between them and the rest.

Here's how it works: a child with working parents can get 30 hours of free nursery care from the age of nine months up to primary school. Only some disadvantaged two-year-olds can qualify for 15 hours a week, but that entitlement now reaches "fewer than 30% of two-year-olds", says the Institute for Fiscal Studies (IFS).

This means that children of the best-off are eight times more likely to benefit from state-funded nursery than the most disadvantaged children, says the New Economics Foundation. As the IFS says, the system "almost by definition excludes the poorest families". No wonder primary headteachers I have spoken to say they can immediately tell which children have had full nursery education, which have had a little, and which have had none.

Sarah Ronan, the director of the Early Education and Childcare Coalition, tells me pithily: "Imagine denying the poorest children access to primary education. We just wouldn't stand for it. Yet we allow that to happen in the early years while we wring our hands about school-readiness and scratch our heads about Neets."

The head-scratching may be over when Milburn's report lands. Meanwhile, Badenoch has little to say about Neets, but her wider plans for the jobless see no investment in training or extra support into work. Reform UK dared to say she didn't go far enough. There it is: the age-old divide, psychological and emotional as well as political, between the left's practical social policy to lift people up and the right's punitive desire to give every underdog a kick.