The Controversial Two-Child Cap Benefits in the U.K.
By Stephen Wilson, one of our reporters abroad
It is hoped we can do away with the two-child cap on government benefits. Pressure must be brought to bear in able to get the new government to scrap this inhumane rule!
“'They are telling me how to live with three children off that money; so it causes me worry. Like even before I get paid like I know what's going out, I know what I'm gonna be left with, and I know it's gonna be a struggle again. It makes you lose everything--your motivation, your ambition, you know your mental health. How can I ever think about working when I'm constantly feeling ill, feeling sick, and feeling like I haven't been able to do anything that I wanted to?” stated Daneen, who has 3 children from Yorkshire, in England.
Amanda, a mother with 4 children who has a degree in graphic design was forced to sell her own business because she lacked sufficient money from her benefit payments to feed her family. She stated, “I'd started buying knitting machines, which I had to sell to basically feed the kids. I started buying equipment to make the graphic studio in the house and then when I started getting broke I sold back my Apple Mac. So all the things I tried to make myself financially secure had to go.”
These two women had their dreams shattered by the impact of the Tory government's two-child cap policy. The cases were cited by a report undertaken by the Center for Analysis of Social Exclusion titled “Making Work Pay” (The labour market effects of capping child benefits in larger family, June 2023). The report found that this law failed to encourage more women on benefits to take jobs and to limit the increase in having children. It has also arguably not cut costs but increased costs.
In fact, the policy has only succeeded in a soaring rate of child poverty along with an immense psychological and physical toll on health. In a word, the law is a disaster affecting as many as 1.6 million children.
Growing up as a child in deep poverty can devastate a child's self-esteem. For example, Aaron told a psychologist how difficult it was to grow up in a family of 7 children without a father figure. Lack of money meant children wore second hand clothes and had dirty sweatshirts. His grandmother would rush him through the streets to school shouting at them to hurry up while she pushed some prams. Aaron tells how other people who noticed them would frown, avoid eye contact and make unpleasant comments about them. When they got to school the other children and parents would avoid their company. According to the psychologist Melanie Fennell, “Throughout his school days, Aaron felt a deep sense of shame. he saw himself as a worthless outcast, whose only defence was attack. He was constantly fighting and scuffling, failing to engage in lessons, and as a consequence left with no qualifications, and became involved with other young people operating on the fringes of the law” {see pages 53-54 of “Overcoming Low Self Esteem: A Self Help Guide Using Cognitive Behavioural Techniques, Second Edition, by Melanie Fennell, 2016, London: Robinson}.
A teacher who has worked in school for many years can tell you how some children can be very cruel to other children. Poverty is condemned as a vice by some children. Children who go to school betraying signs of poverty are often teased and bullied. That is the often-hidden cost of this inhuman child capping policy which needs to be faced.
So where did this rule come from, this two-child cap? The two-capping policy on child benefit was introduced by George Osborne in April 2017. The new law was part of a harsh austerity policy designed to severely limit child benefit in order to relieve the burden on tax payers as well as encourage those receiving benefit to participate in the labour market. The new law meant that any family could no longer claim benefit for a 3rd or subsequent child after April 2017. They could no longer obtain universal credit and child tax credit to cover a 3rd child.
The result of this policy dramatically fueled child poverty where as many as 1 out of 4 children in Britain are now currently growing up in poverty. The law means that a family loses an average of 220 pounds a month. Research by the Resolution Foundation states that the number of families affected by this policy has increased from 70,000 to 450,000 in the past 6 years and that a 3rd of its impact is yet to come.
Despite the adverse impact of this law, the government refuses to make a commitment to abolishing it. They claim they lack the money, need to make tough decisions, and appear financially responsible. T hey don't want to upset the financial markets or alienate the rich. But the passing of such a law would bring 300,000 children out of poverty and assist 800,000 children who are undergoing deep poverty. Yet the government prefer to 'play safe' to the point of absurdity !
But how justified are those claims that “there is no money” available to scrap this policy?
They are not justified at all! There is indeed money available…
There is money--but a deficit in imagination. In fact, the estimated cost ranging from 1.7 billion to 3 billion pounds in the context of a 2.7 trillion-pound economy is a drop in the ocean. A government with a bit of imagination could easily find this money.
A tax expert Richard Murphy can find it! He has claimed that drawing money from tax capital gains at the same rate would net the treasury 12 billion pounds a year. The government could also raise 145 billion pounds by restricting tax relief on pensions to the basic rate of income. You could also gain money from removing the losses the Bank of England makes on gilt holdings from the way the debt rule is calculated. That would raise 20 billion pounds, according to consultancy Oxford Economics.
There are other obvious measures such as imposing a wealth tax. But this government seems to be frozen into paralysis by fear of offending the rich as well as the establishment. They are more set on appeasing the super-rich than assisting poor children.
That no mention was made of scrapping this callous two-child capping law in the intended King's speech is rightly seen as a disgrace. It is likely that the new Labour government will be forced by their own politicians and voters to take more radical measures.
That you have to put pressure on such a government to abolish such a law is incredible. It serves as a terrible indictment of this new government.