Thousands more children are living in poverty since the Labour party came to power due to the two-child benefit cap, according to a recent claim made by a charity. The charity is urging Labour to abolish the two-child benefit cap, citing the detrimental impact it is having on families. Since taking office, around 10,000 children have reportedly fallen into poverty as a direct result of this policy, as per analysis conducted by the Child Poverty Action Group (CPAG).
Chancellor Rachel Reeves has indicated that the government is unable to abolish the controversial welfare policy at this time due to the current state of public finances. However, she continues to face mounting pressure from campaigners and even some members of her own party to reconsider this decision. The two-child benefit cap was initially introduced by the previous Conservative government led by David Cameron, and its effects were already felt by 450,000 households and 1.6 million children last year, based on official figures.
CPAG’s chief executive, Alison Garnham, highlighted that the two-child limit is a significant factor driving the rise in child poverty and emphasised the urgent need to eliminate this policy to prevent more children from slipping into poverty. The charity has called for the two-child limit to be scrapped in the upcoming Budget, citing it as a crucial step towards mitigating the escalating child poverty crisis.
The Joseph Rowntree Foundation (JRF), another social change organisation, echoed similar sentiments, stating that the current figures serve as a stark reminder that hardship continues to persist. JRF has urged the government to outline a plan this autumn to address the escalating child poverty levels, emphasising the moral imperative and economic benefits of doing so.
Research conducted by a think tank indicated that reversing the two-child limit could potentially lift over half a million children out of absolute poverty. The Institute for Fiscal Studies (IFS) estimates that eliminating this policy would initially cost the government £1.7 billion annually, rising to £2.5 billion per year. Despite the costs, IFS highlighted this as the most cost-effective strategy available to reduce child poverty significantly.
Furthermore, the IFS cautioned that certain households currently exempt from the benefit cap would be affected if the two-child limit were to be scrapped. The benefit cap, introduced in 2013 under the coalition government, aims to ensure that households do not receive benefits exceeding the prescribed cap limit. Advocates have called for the abolishment of both the two-child benefit cap and the benefit cap to address the widening child poverty crisis effectively.
In response to the growing concerns, a Government spokesperson reiterated the commitment to reducing child poverty and enhancing support for vulnerable families. The government has established a cross-government taskforce to develop a comprehensive strategy to tackle child poverty and provide better opportunities for children. Additionally, measures such as extending the Household Support Fund and reviewing Universal Credit are part of the government’s broader plan to address inequality and promote financial stability for households.
As the discussions around child poverty intensify, the call to abolish the two-child benefit cap gains momentum among various organisations and advocates, emphasising the urgency of addressing this pressing issue to safeguard the well-being of children and families across the country.