The Criminal Justice and Courts bill will progress through its third reading in the House of Commons later.
It's proposing mandatory two year sentences for a second knife offence, six months for young people, irrespective of the circumstances.
The government says action must be taken to cut down on the number of knife related offences.
According to London's Metropolitan Police knife crime had fallen by 11.5% in the capital during 2013-14, with 1,300 fewer offences - the lowest figure in the last seven years.
But XLP, which works with young people in several parts of London, says criminalisation is not the answer.
CEO Patrick Regan OBE told Premier: "We're not saying that enforcement isn't necessary, of course enforcement is necessary and of course we need to be tough on crime.
"But actually we need to look at the bigger picture of what's going on.
"Kids mainly carry knives for protection."
He added that more money needs to be invested in tackling the root cause.
The charity says it costs £4,000 per year to mentor a young person whilst the cost of a place in a Young Offenders Institute is £65,000 a year or £212,000 in a Secure Children's Home.
"Just out of sight doesn't mean that we've dealt with the issue," he said, "that's what we're trying to say, some of these kids are absolutely petrified and they're carrying knives because they're so scared of what's going to happen."