If labour are looking to make savings on the welfare bill, there are plenty of places other than the two-child benefit cap to look – starting with the pensions triple lock
In a manifesto that was light on detail, two of Labour’s biggest promises were to adopt Conservative policies: on the fiscal rules and the two-child benefit cap. The latter was always a curious choice. Presumably meant both to shore up the party’s credibility on the economy and as a loyalty test for backbenchers. It succeeds at neither.
The original argument for the cap was that those on welfare should face the same financial choices as those in work when it comes to family size. But it does not follow that children should be punished for the circumstances of their birth. The foundational principle of the welfare state is that it should be a safety net for the most vulnerable – and who is more vulnerable than a child delivered into a poor family?
Nor is there much evidence that the policy has been effective, even on its own dubious terms. Employment and fertility rates among affected families have gone largely unchanged while child deprivation – albeit on measures of ‘relative’ rather than ‘absolute’ poverty – has increased.
We are a long way from the culture of the 2010s, which saw families on welfare derided as scroungers and paraded in ghoulish documentaries like the BBC’s Benefits Street. This is, in part, thanks to the success of Universal Credit which has seen unemployment fall to 4.4 per cent and enabled 2.4m claimants to work. Given the demographic challenges we are facing from an ageing population, arguments that anyone should be having fewer children are surely now defunct. And while 60 per cent of the public say they support the cap, even high-profile conservatives like Suella Braverman have changed their minds. In any case, a ‘mission driven’ government should not be pursuing popularity for its own sake.
Indeed, if Keir Starmer wished to make savings on the welfare bill, there are many better places to look. He could start with the unsustainable and indefensible pensions triple lock. He could then turn his attention to economic inactivity, which has surged since the pandemic, with spending on working age people with a disability or health problem costing £16bn a year – dwarfing the £2.5bn a year that scrapping the child benefit cap would cost. Particularly alarming is the rise in men aged 18-24 with mental health problems – to neglect even to try to get this cohort into work would be to condemn them to a life of despair.
So it is welcome that work and pension secretary Liz Kendall yesterday set out her ambition to reach 80 per cent employment by addressing wider barriers to work like health, skills and transport. It is disappointing, though, that she did not mention changes to work capability assessments or fit notes that make it far too easy to get signed off work. Nevertheless such worthwhile announcements as there are have been drowned out by the prospect of a rebellion over child benefits which was always inevitable.
To have staked so much political capital on a policy likely to prove untenable is a strategic blunder that should surprise those who’ve followed Starmer’s ruthless ascent to the top.
His government will never be more powerful than it is now. If the Prime Minister does not want Britain to be a country where children are penalised for decisions their parents made, where people of working age are trapped in dependency on the state and the elderly are rewarded at the expense of the young, he has a chance to change course – now.