What is the UK’s two-child cap on benefits and will Labour reverse it? | Politics News

The United Kingdom’s newly elected Labour Party is facing growing calls to abolish restrictions to benefits paid to parents that were imposed by the previous Conservative government.

UK governments have provided financial help towards the costs of raising children since 1946.

However, in recent years, payments to families have come under increasing pressure. In 2017, the Conservative government limited the number of children families may claim benefits for to two children.

Often said to hit the poorest in British society the hardest, the two-child benefit cap has long been a source of rancour for many politicians, public figures and antipoverty campaigners.

Hopes had been high that the centre-left Labour Party might reverse the two-child benefit cap on assuming power.

However, Labour Prime Minister Keir Starmer and his finance minister, Chancellor of the Exchequer Rachel Reeves, have so far proved reluctant to address the issue. While acknowledging the unacceptable extent of child poverty in the UK, they have also cited the poor state of the UK’s finances and the cost of extending the benefits system.

What is the two-child benefit cap?

In short, it limits state benefits – Universal Credit and child tax credits – to two children per family.

The two-child benefit cap was introduced by the Conservative government in April 2017 as part of a wider austerity programme and applies to all children born after that date.

At the time of its introduction, then-Chancellor of the Exchequer George Osborne argued that the benefits being paid to larger families were too costly and the limit would “ensure that families in receipt of benefits faced the same financial choices about having children as those supporting themselves solely in work”.

Some exceptions do exist, such as in the case of rape, which campaigners have argued means mothers having to endure the additional trauma of proving a sexual assault to claim the benefits to which they are entitled.

Writing in The Times newspaper on Saturday, Labour MP Rosie Duffield made explicit mention of the clause stating: “The authors of this policy are telling women: disclose to a series of total strangers that your third or any subsequent children are the result of rape and we will pay you after all.”

How has the two-child benefit cap affected families?

Charities and child poverty campaigners have said the two-child cap on benefits has caused a great deal of hardship to families in the UK.

Lynn Perry, chief executive of the children’s charity Barnardos, characterised the benefit cap as a “sibling penalty”, saying: “Most families receiving Universal Credit are in work and many are struggling for reasons beyond their control – such as a family breakup, the death of a partner or losing a job.

“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.”

According to the Institute for Fiscal Studies (IFS), the policy costs low-income families an average of 4,300 pounds ($5,550) a year, the equivalent of 10 percent of their income, in lost benefits.

Government statistics from last year show that half of those impacted by the two-child limit were single parent families. Moreover, the same data showed that 57 percent of those affected already had at least one adult in paid employment.

The number of children affected by the cap is predicted to increase, even as the overall population has been forecast to decline.

Last year, 1.6 million children – one in nine of all UK children – were impacted by the cap. That number represents an increase of 100,000 over the previous year, according to the IFS.

Moreover, if the cap remains in place, an additional 250,000 children will be affected by next year, rising to an extra half a million by 2029, IFS data showed.

Exacerbating the difficulties faced by families affected by the two-child restriction is previous legislation capping the overall volume of state payments families are entitled to. Introduced in 2013, the benefit cap limits the amount of benefits most working-age households can receive if they work fewer than 16 hours a week.

Will the new government scrap the cap?

The Labour Party, which won a landslide election victory on July 4, has long been divided over whether to retain the two-child cap on family benefits.

Several of the party’s MPs and the party’s leader in Scotland’s devolved parliament, Anas Sarwar, have all publicly called for the cap to be overturned.

Starmer has previously opposed abolishing the cap, arguing that, given the country’s poor financial condition, it could ill afford the estimated 3 billion pounds ($3.87bn) a year abolishing the cap would cost.

Faced with the growing threat of a rebellion within his party over the issue, the prime minister indicated on Monday that he may be ready to abolish the cap.

However, expectations of any immediate policy change were dashed by Liz Kendall, the work and pensions secretary. Pointing to the government’s wider strategy to tackle child poverty, Kendall cautioned on Sky TV on Tuesday morning: “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 calling for the two-child cap to be repealed?

In addition to a growing chorus of Labour voices is what appears to be a growing parliamentary bloc supporting the cap’s abolition.

So far, the Green Party, the Liberal Democrats and the Scottish National Party as well as a large number of NGOs, antipoverty campaigners and even former Conservative Home Secretary Suella Braverman, known for her uncompromising right-wing views, have all called for the cap to be scrapped.

Speaking in May, former Labour Prime Minister Gordon Brown criticised the policy, telling the BBC: “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.”