The UK government is contemplating a significant policy shift by potentially scrapping the two-child benefit cap. This change could have profound implications, lifting hundreds of thousands of children out of poverty. The proposal has garnered support from cabinet ministers and Labour MPs, who argue that the current policy is both unfair and ineffective in combating child poverty.
Background on the Two-Child Benefit Cap
The two-child benefit cap has been a contentious issue for years, disproportionately affecting low-income families with multiple children. Former Prime Minister Gordon Brown has been a vocal critic of the policy, labeling it as "cruel." Recently, Brown met with Labour leader Keir Starmer to discuss the possibility of abolishing the cap.
Starmer has privately expressed his desire to end the two-child limit as part of his broader child poverty strategy, believing that this change would significantly address child poverty and enhance living standards for low-income families.
Key Supporters of the Proposal
Labour’s Work Secretary Liz Kendall and Education Secretary Bridget Phillipson are leading efforts to eliminate the two-child limit within their child poverty strategy. They have received backing from Health Secretary Wes Streeting and Deputy Prime Minister Angela Rayner.
Impact of the Current Policy
- Estimates indicate that over 100 children are pushed into poverty every day due to the existing system.
- The Child Poverty Action Group (CPAG) has emphasized the urgent need for action to address this issue.
Financial Implications
Scrapping the two-child benefit cap would incur a cost of approximately £3.5 billion per year. This proposal follows a recent reversal on the winter fuel allowance policy, marking another significant U-turn for Rishi Sunak’s administration.
Criticism of Welfare Reforms
Critics argue that Sunak’s management of welfare reforms has been inadequate, leading to repeated U-turns on key policies, including the recent reversal on the winter fuel allowance.
In recent months, Sunak’s administration has faced increasing pressure regarding its welfare reform policies, which include plans to:
- Cut benefits by 10% across all households.
- Raise taxes by up to £1 billion through an increase in National Insurance contributions.
However, the government was compelled to make an embarrassing U-turn after opposition parties threatened mass abstentions during Commons votes on these measures.
Future Considerations
This decision represents another major shift in Rishi Sunak’s administration amid growing criticism over its welfare reform policies. A spokesperson for Sunak stated, “Ministers are working hard across Whitehall on various options including scrapping or changing existing caps or limits.”
A source close to Downing Street added, “While there are no guarantees about what will happen next year – we do know we can’t keep going down this road.”
It remains uncertain whether scrapping or altering existing caps will satisfy some backbenchers who are still skeptical about the changes made thus far.
In response, a senior Conservative MP remarked, “If they’re not prepared now then I think they’ll find themselves facing even greater opposition when they try again next year.”
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