Child Benefit used to be a universal benefit and was not means-tested, but that changed in 2013 with the introduction of High Income Child Benefit (HICBC), which effectively claws back child benefit if any family member earns £60,000 pa (previously £50,000). until 2024).
In 2017, a policy was introduced to limit Universal Credit and child tax credit to 3 peoplerd and subsequent children born after that year. The stated goal was to make the two-child limit “Families on benefits face the same financial choices as self-employed families to have children“. Without commenting on the moral issue of using the benefits system to discourage people from having children, the policy failed to achieve its goal, with studies showing only a small reduction in births for affected families.
What politics there is achieved is a massive increase in child poverty. Currently, 25% of children live in poverty. In the January 2024 Resolution Fund report, hFamilies with three or more children will each be in poverty by 2028-29, up from a third in 2013-14.number here A quarter of two-child families are expected to remain in poverty. This supports the argument that the two-child benefit limit increases child poverty. In 2023, 420,000 families are estimated to be affected by the two-child limit, so the number of families affected is significant.
The effect of the limit will worsen.
The impact on child poverty continues to increase as the policy applies to children born after 6 April 2017 and is expected to affect 750,000 families once the policy is fully implemented.
So why isn’t the new Government scrapping the two-child limit?
Seven Labor MPs have been expelled from Parliament for supporting the King’s Speech amendment. At first glance, this suggests that the Labor Party is opposed to changing the limit. However, comments from several other Labor MPs suggest there is a strong desire to reduce child poverty and that the suspensions are due to party unity around the King’s speech. The way forward may be to persuade the Labor party to change its policy from within. The main objection to the policy change appears to be the estimated cost of £1.7 billion and where it will be funded.
To put the costs into perspective, in the Spring 2024 budget the High Income Allowance Threshold was increased from £50,000 to £60,000 in 2025-26, worth £635 million.
In a broader context, investing in children has long=term benefits, with better educational outcomes and longer healthy lives. Sir Michael Marmot advocates “Give every child the best start in life” as the first of six key recommendations. Just Society; Healthy Life to address health disparities.
As a local councillor, I have seen the impact of early intervention and prevention (or lack thereof) on the costs of high-needs expensive intervention. So perhaps the £1.7bn cost of removing the two-child limit would be offset by £7.3bn a year in R&D tax credits, of which over £1bn goes to overseas R&D and 80% of the cost % should be compared. continues the investigations that will take place anyway.
The case for abolishing the two-child limit seems strong. He did not achieve his goals. This has led to an increase in child poverty.
Some additional reading
Politics
MP Connor Naismith wrote on X/Twitter:
“I love lifting 7,000 children out of poverty in my district. Proposals to amend the King’s speech will not do that. A Labor government will have a serious, deliberate plan. I will work constructively with my colleagues to ensure that we implement this plan.”
Sam Corcoran is a Labor councillor, former leader of Cheshire East Council and a member of the Roman Catholic National Justice and Peace Network.
