Thinktank Warns: Two-Child Benefit Cap Set to Impact Additional 670,000 Children by 2029

Thinktank predicts 670,000 more children will be affected by two-child limit in the next five years

The report from the Institute for Fiscal Studies suggests that the Labour party may face increased scrutiny to abolish the policy should they come into power, as activists urge for its swift removal.

Political correspondent @Journoamrogers

Monday, June 17, 2024, 12:

A prominent think tank has issued a warning that an additional 250,000 children will be affected by the two-child limit on benefits in the coming year, with the number expected to climb to 500,000 by 2029.

The Institute for Fiscal Studies (IFS) has projected that, without policy changes, the figure for children impacted by the cap on child benefits — which restricts the benefits to only the first two children in most families — will escalate to 670,000 by the conclusion of the upcoming parliamentary term.

In 2017, the Conservative government introduced a policy limiting Child Tax Credit and Universal Credit to only the first two children in a family.

Activists have long advocated for its elimination, arguing that it would raise thousands of children above the poverty line.

A recent report by the Joseph Rowntree Foundation (JRF) reveals that 40% of employees in primary schools and GP offices have thought about resigning due to the distressing levels of poverty they witness among the public.

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The Joseph Rowntree Foundation reported that service providers are overwhelmed as they extend additional support to almost four million individuals who are facing difficulties in affording basic necessities such as food, heating, and clothing.

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According to the Institute for Fiscal Studies, the policy limiting welfare benefits to two children has resulted in an increase in the proportion of children from larger families living in relative poverty, from 35% in the 2014-15 period to 46% by 2022. This contrasts with a decrease in poverty levels among families with one or two children during the same timeframe.

The Labour Party has been urged to remove the cap, with former Prime Minister Gordon Brown among the voices calling for its end. However, the party has yet to pledge that it will do so, pointing to the nation's financial situation as the reason for their hesitance.

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The call to eliminate the cap gained more momentum when prominent conservative figures, such as ex-home secretary Suella Braverman and Reform party leader Nigel Farage, both advocated for its removal.

Removing the cap is not mentioned in the platforms of either the Conservative or Labour Parties, with only the Green Party and the Liberal Democrats pledging to do so in their proposals to voters.

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According to the Institute for Fiscal Studies, eliminating the cap would cost the government approximately £3.4 billion annually, an amount that is comparable to halting increases in fuel taxes for the duration of the upcoming parliamentary term.

Currently, the restriction impacts two million kids, with additional children becoming subject to it annually as it targets those born on or after April 5, 2017.

The Institute for Fiscal Studies indicated that once fully implemented, the cap will impact 20% of children, and this figure increases to 38% among children from the lowest income quintile of families.

The report indicated that 43% of children from households that include at least one individual of Bangladeshi or Pakistani descent will be impacted, with the affected families experiencing an average annual loss of £4,300, which amounts to 10% of their yearly income.

IFS research economist Eduin Latimer stated, "The two-child policy represents one of the major reductions in social benefits since 2010 and, uniquely among such reductions, its impact grows annually as it applies to an increasing number of families."

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Mubin Haq, the chief executive of the abrdn Financial Fairness Trust which sponsored the study, stated: "The cap has notably impacted child poverty in bigger families at a time when poverty rates for families with one or two children decreased.

"If the forthcoming administration is committed to addressing child poverty, it must reconsider the policy that restricts benefits to two children per family."

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Alison Garnham, who leads the Child Poverty Action Group, stated that the primary cause of child poverty in the UK is the policy limiting benefits to two children.

"Governments committed to improving conditions for future generations must urgently eliminate the two-child policy."

A spokesperson for the Labour Party stated, "We fully recognize the enormity of the challenges we will face should we be victorious in the upcoming election."

The Labour Party has outlined initial steps they would take, including the provision of complimentary breakfast clubs at all primary schools, reducing fuel poverty and lowering energy costs, prohibiting unfair zero-hour contracts, ensuring fair wages, abolishing no-fault evictions, and generating quality employment opportunities nationwide.

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