According to a recently published report from the London School of Economics, the UK’s divisive two-child benefit limit has had a pernicious financial and social impact on hundreds of thousands of families.
Entitled ‘Making Work Pay? The labour market effects of capping child benefits in larger families,’ the study found that punishing lower-income families that choose to have more than two children ‘appears to be ineffective at best and discriminatory and harmful at worst.’ Presently, UK families on benefits are entitled to claim £244 per month for their first child and a further £244 for their second child.
Kitty Stewart, a co-author of the study, declared the report found that ‘rather than increasing employment, the two-child limit increases poverty and hardship’ which ‘can actually make it harder for parents to take up work.’
The architect of the two-child policy was former Chancellor of the Exchequer, George Osborne. It was one of the many benefit reforms as part of the then government’s austerity agenda and meant that parents would be unable to claim either universal credit or child tax credit for their third or any subsequent child born after April 2017. Those in favour of the policy’s implementation argued that it would incentivise parents to gain employment, as well as reducing the deficit by £1.36 billion per year. Therefore, the government was attempting to influence both the behaviour of welfare-seeking parents to ‘reflect carefully on their readiness to support an additional child’ and the national debt figure which was uncomfortably high for some since the fallout of the 2008 financial crash and the Great Recession.
It was based on the notion that ‘benefits scroungers’ should not be entitled to further state support if they wanted a larger family amidst a budget-tightening economic agenda. For the government, it validated the destruction of ‘the fundamental link between need and the provision of minimum support,’ explicitly making clear that ‘some children, by virtue of their birth order, are less deserving of support.’
The latest report from the London School of Economics has proven that the arguments for implementing the policy in the mid-2010s have failed, stating that its primary purpose has forced larger families into poverty and has harmed their mental health. Amid a cost-of-living crisis that has emaciated the purchasing power of many lower-income families, the policy is now thought to affect approximately 1.5 million children across the UK, with around one million classed as ‘growing up in poverty’ as a direct result of the two-child benefits cap. A study conducted by York and Oxford academics concluded that the decision to continue the policy throughout the cost-of-living crisis was ‘creating the almost impossible context for affected families, with a risk of long-lasting harm for millions of children.’
The Guardian recently reported individual testimonies from families that are currently being hit by the two-child benefits cap. They revealed the dire financial situation that some parents are facing and the uncomfortable decisions being made on a regular basis. These included parents skipping evening meals, the inability to send children to paid after-school clubs or outings, and mothers feeling pressurised and forced to gain employment when their babies are just a few months old.
Despite the government’s commitment to economic growth, this is a damaging decline in the quality of life for many British families as a result of this policy and is not conducive to achieving a prosperous economy or a healthy society. The policy cuts household income by £2800 on average and impacts one in twelve of all UK children.
The fallout from the policy has intensified over the past year. The Chief Executive of Child Poverty Action Group confirmed that ‘the number of children in poverty rose by 350,000 last year’, making the definitive link with the government’s policy as a contributing factor to this increase, adding that ‘the two-child limit played a big part in that rise.’
The policy continues to be an extremely divisive one. User-submitted comments on The Mirror’s article entitled ‘Should the two-child benefit limit be scrapped?’ illustrates the polarised nature of the public debate with regard to the policy. One member of the public criticised the government, stating that ‘to put it another way, should a child be penalised for being born?’ Another commented that ‘if you can’t afford kids, don’t breed … why should everyone else pay for them? Full-time mum isn’t an occupation … get yourself a job.’
With Labour still comfortably ahead in the polls, widescale benefit reforms look increasingly likely come 2024. Despite Keir Starmer rolling back on his commitment to abolish universal credit entirely, the two-child policy may be part of Starmer’s reform agenda, with the Labour Party exploring the possibility of scrapping the two-child rule entirely. The shadow secretary of state for work and pensions, Jonathan Ashworth, has previously accused the government of providing ‘inadequate levels’ of funding that ‘punish’ larger families.
Fundamentally, the London School of Economics study declared that the two-child policy fails to understand how and why some parents prioritise caring roles over work, especially in a post-Covid socio-economic environment. There is an array of ‘costs and complications’ of returning to work whilst raising young children, with the barriers to entry set much higher in lower-income families. Finding suitable and affordable childcare is just one of those difficulties and illustrates the wider issues with the British political economy. The housing crisis forces younger parents to move away from the more expensive cities they were raised in, meaning the often-free childcare assistance provided by grandparents is terminated due to geographical complications.
The next government will want to get a grip on more than just benefit caps if they desire an economy that is buoyant and prosperous.
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