Labour must ditch two-child benefit cap
Dubbed “the worst ever social security policy” by an eminent social policy professor, the two-child limit has become front page news.
The policy denies universal credit or child tax credits, worth up to £3,235 a year per child, to third and subsequent children born since its introduction in April 2017 (with a few exceptions). In a BBC interview on 16 July, the Labour leader Sir Keir Starmer stated baldly that “we are not changing that policy”.
It was the unequivocal, matter of fact nature of that statement that has so upset so many people, including Labour MPs and supporters, anti-poverty organisations and academics. Although subsequent justifications have centred on fiscal discipline and “tough decisions”, there has been no authoritative suggestion that scrapping the policy remains an ambition once resources allow. This is, despite previous descriptions of it as “heinous”, “obscene and inhumane” and “chilling” by current shadow cabinet members including Sir Keir himself.
Keeping the two-child limit means Labour will keep growing child poverty into the system
By April 2023, 1.5 million – that is one in ten – children lived in families, in or out of work, affected by the limit, with some minority ethnic families and domestic abuse survivors particularly badly hit. Coincidentally, the furore coincided with the report of the first comprehensive academic assessment of the effects of the two-child limit (and also the benefit cap which limits the total amount most claimants can receive and like the two-child limit breaks the historic link between assessed need and social security entitlement). It found no evidence that the policy met its behavioural aims of encouraging parents to consider the affordability of more children or of increasing employment.
Instead it gathered “swathes of evidence” of the “extreme hardship” caused, as parents were unable to cover their most basic living costs, leading to debt and anxiety. Despite parental attempts to shelter their children from the policy’s impact, it damages children’s well-being in the here and now as well as their future opportunities.
Other analysis shows that the two-child limit acts as a key driver of child poverty. Moreover, it is contributing to a growing problem of deep poverty. It is estimated that abolition of the limit would lift around 250,000 children out of poverty and mean that 850,000 children suffered less deep poverty. Moreover, academic analysis for the Child Poverty Action Group indicates that the economic and societal costs of child poverty, including expenditure on public services, amounts to as much as £39bn. Thus, as Tom Pollard of the New Economics Foundation has argued, there would be significant returns from scrapping the limit, a move which should be seen as a preventative measure that invests in children.
Just days before his BBC interview, Sir Keir promised the Guardian that Labour would be “laser-focused” on tackling poverty. Welcome as this was, to rule out the single most effective policy tool for reducing child poverty would mean that making good on this promise would be akin to trying to drive a car with the hand break on. As the Bishop of Durham tweeted, keeping the two-child limit means Labour will “keep growing child poverty into the system”.
Unfortunately, in the face of widespread anger at the suggestion that Labour will keep the two-child limit, it has become something of a totem of fiscal discipline and “tough decisions”. But those who suffer the consequences will not be Labour politicians on either side of the argument; it will be the mothers, fathers and children whose lives are stunted and life-chances diminished by this cruel and inhumane policy.
Baroness Lister, Labour peer and Emeritus professor of social policy at Loughborough University
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