What is the benefit cap of two children in the UK, and will Labour ever lift it?
There is a rising movement in the UK for the newly elected Labour Party to remove limits on benefits that the former Conservative administration placed on parents.
The Scottish National Party (SNP) put out an emergency vote on Tuesday to remove the two-child cap on some family benefits, which the government had to accept. Following their vote in favour of the amendment, seven Labour MPs were barred from the party for a period of six months, defying the prime minister’s directives. Voters rejected the measure 363 to 103.
Since 1946, UK governments have contributed financially to the expenses associated with raising children.
But there has been more pressure on payments to families in recent years. The Conservative government restricted the number of children for whom a family could receive benefits to two in 2017.
The two-child benefit cap has long been a source of resentment for many politicians, public figures, and anti-poverty activists. It is frequently claimed to impact the poorest in British society the hardest.
When the centre-left Labour Party came to office, there was a lot of expectation that they would lift the two-child benefit cap.
Chancellor of the Exchequer Rachel Reeves and Labour Prime Minister Keir Starmer have yet to show a willingness to take up the matter, though. They have noted the unacceptably high rate of child poverty in the UK, but they have also pointed out the dire financial situation in the country and the expense of expanding the benefits programme.
What is the benefit cap for two children?
It restricts state benefits, such as child tax credits and Universal Credit, to a maximum of two children per family.
As part of a larger austerity drive, the Conservative government imposed a two-child benefit cap in April 2017 that is applicable to all children born after that date.
When the limit was first proposed, George Osborne, the then-Chancellor of the Exchequer, claimed that it would “ensure that families in receipt of benefits faced the same financial choices about having children as those supporting themselves solely in work” and that the benefits being paid to larger families were too expensive.
What is the impact on families of the two-child benefit cap?
Families in the UK are suffering greatly as a result of the two-child benefit cap, according to charities and child poverty activists.
The chief executive of Barnardos, a children’s charity, Lynn Perry, called the benefit cap a “sibling penalty” and stated that the majority of families receiving Universal Credit are employed, and many are experiencing hardships due to uncontrollable circumstances like divorce, partner death, or job loss.
“Yet this policy denies families the support they need to afford the basics so they have enough to eat and can afford to heat their homes properly. Children are ultimately paying the price, growing up in poverty and dealing with the consequences of this for the rest of their lives.”
The Institute for Fiscal Studies (IFS) estimates that the policy deprives low-income households of lost benefits totaling 4,300 pounds ($5,550) annually, or 10% of their income.
According to government statistics from the previous year, families with a single parent made up half of those affected by the two-child limit.
Furthermore, according to the same data, 57% of those impacted already had at least one adult working for a living.
While the population as a whole is expected to fall, the number of children impacted by the cap is expected to rise.
The cap affected 1.6 million children last year, or one in nine children in the UK. The IFS claims that figure is an increase of 100,000 from the prior year.
Furthermore, IFS data indicated that 250,000 more children will be impacted by the cap by the following year, and that number will increase to half a million by 2029.
A further challenge for families impacted by the two-child limit is that prior laws have limited the total amount of public assistance that families can receive. The benefit cap, which went into effect in 2013, places a restriction on the amount of benefits that most working-age households can obtain if they work fewer than 16 hours per week.
Will the next administration remove the cap?
The question of whether to keep the two-child family benefit cap has long split the Labour Party, which scored a landslide election victory on July 4.
The party’s leader in Scotland’s devolved parliament, Anas Sarwar, along with a number of its MPs have all openly advocated for the ceiling to be lifted.
One of the seven dissident Labour MPs who supported the amendment to remove the quota, Zarah Sultana, stated on Wednesday morning that she had “slept well knowing that I took a stand against child poverty.”
Starmer had previously opposed lifting the cap, claiming that the nation’s dire financial circumstances made it impossible for it to pay the projected $3 billion ($3.87 billion) annually that lifting the cap would require.
In response to the mounting possibility of a party revolt over the matter, the prime minister hinted on Monday that he would be prepared to do away with the cap.
The work and pensions secretary, Liz Kendall, however, crushed hopes for any quick changes to policy. Kendall cautioned on Sky TV on Tuesday morning, citing the government’s larger plan to combat child poverty and said, “We will look at [removing the two-child benefit cap] as part of this strategy, but we have to show with any commitments how we will fund them.”
Who else is advocating the removal of the two-child cap?
There’s a growing chorus of Labour voices backing the removal of the cap, and it seems that a growing parliamentary bloc is joining them.
Thus far, the cap has been opposed by the Green Party, the Liberal Democrats, the Scottish National Party, a plethora of non-governmental organisations, advocates against poverty, and even the notoriously conservative right-wing former Conservative Home Secretary Suella Braverman.
“The tragedy is we are now writing the future history of our country by neglecting children who we have condemned to poverty and not being able to have a decent start in life who are going to fail in the future,” former Labour Prime Minister Gordon Brown said in a May speech to the BBC, criticising the policy.