What is the two-child benefit cap?
It prevents parents from claiming child tax credit or universal credit for any third or subsequent child born after April 2017. It was introduced by the former chancellor George Osborne in his austerity drive with the aim of encouraging parents of larger families to find a job or work more hours.
What impact has the cap had?
It has affected an estimated 1.5 million children, and research has shown that the policy has impoverished families rather than increasing employment. Last week a study found that as many as
one in four children in some of England and Wales’s poorest constituencies are in families left at least £3,000 poorer by the policy. It also found that in the most ethnically diverse communities, 14% of children were hit by the cap.
https://www.theguardian.com/politics/2023/jul/16/labour-keep-two-child-benefit-cap-says-keir-starmer
How much would it cost to scrap the cap?
Abolishing the cap would cost £1.3bn a year but would lift 250,000 children out of poverty, and a further 850,000 would be in less deep poverty, according to campaigners. The End Child
Poverty coalition says removing the cap would be the most cost-effective way of reducing the number of children living in poverty.
£1.3bn in an economy worth £3.5tn. 68 million people. 12.5 million children (16 or under) and 1.5 million of those directly affected (into the poverty zone). Close to 10% of all UK children, then, written off for the sake of £1.3bn. Sounds fecking insane to me.
If you study Milton Friedman, neoliberal architect, Chicago School, you'll come across the term "neighbourhood effects" (often). Greater than the sum total of its parts (his theory). Now, he wouldn't be in favour of UC but he would also pronounce the UK/US (and more) monopolies which require breaking up (many sectors). So, taking 1.3bn, a tiny amount given it represents 9% or so of all children, and thus Y % of all families, you could map it easily, and lifting people out of absolute poverty. These are neighbourbood effects. It's an austerity agenda which cannot see the forest for the trees which says otherwise.
(25% of the poorest directly affected by £3k in an era of cost of living crisis and inflation unknown in decades).
There is no version of Labour which would not scrap this cap. Their refusal to commit to it means it isn't Labour. Even the Tories might consider scrapping it, it is that nonsensical. Indeed, if I were Sunak I would scrap it and outmanoeuvre Labour from the centre. Leaving them with impossible questions to answer.
