As the benefits bill ballooned, the Government’s attempt to make even the most modest of savings spectacularly crashed and burned in the Commons at the beginning of July, in the face of a massive rebellion on the labour benches. Now it is becoming increasingly clear that the Government, notwithstanding the growing black hole in the public finances and the certainty of higher taxes in the forthcoming budget, is going to increase the welfare bill by another £3 billion per year by repealing the two-child benefit cap. In opposition, when Labour was trying to establish its economic credentials, removing the cap was no part of the plan. Now, after a year in which any such credentials have been blown away, apparently the cap is to be removed.
The imposition of the cap by George Osborne in 2017 was popular and it remains so. Aside from making necessary savings, the policy removed a widely perceived unfairness. Namely, if you had another child, there was no expectation that your employer would increase your salary. If however, your income was provided through welfare benefits, that income would be increased to accommodate the additional child. It was unfair that families on means-tested benefits were being subsidised to have more children at the expense of everyone else. For that reason, incremental increases in income for additional children, was capped at the second child.
The removal of the two-child benefit cap is also a policy being touted by the Reform Party. The rationale that they give is that we need to increase our birth rate. I don’t believe it will work. Other countries have tried incentive payments to increase their birth rates without success.
The falling birth rate in developed countries has much more to do with other complex social factors than it has to do with the cost of raising children.
Anyway, in the unlikely event of the policy working, it would only be doing so for families on welfare, at the expense of families without it.
We are told that removing the cap is the swiftest way to reduce child poverty.
There is a common misunderstanding about the two-child cap: additional children are not left without means. A universal (not means tested) Child Benefit is paid in respect of all children, whatever their number, and irrespective of whether their family is on welfare or not.
Currently the rate is £26 per week for the eldest child and £17 per week for every additional Child.
The removal of the two-child benefit cap is also a policy being touted by the Reform Party. The rationale that they give is that we need to increase our birth rate. I don’t believe it will work. Other countries have tried incentive payments to increase their birth rates without success.
The falling birth rate in developed countries has much more to do with other complex social factors than it has to do with the cost of raising children.
Anyway, in the unlikely event of the policy working, it would only be doing so for families on welfare, at the expense of families without it.
We are told that removing the cap is the swiftest way to reduce child poverty.
There is a common misunderstanding about the two-child cap: additional children are not left without means. A universal (not means tested) Child Benefit is paid in respect of all children, whatever their number, and irrespective of whether their family is on welfare or not.
Currently the rate is £26 per week for the eldest child and £17 per week for every additional Child.
Andy Burnham complains that we are in hock to the bond markets. Well, we are. It’s a fact: Government borrowing to cover day to day expenditure is increasing well beyond what the Chancellor planned. As a consequence, the markets are charging us higher interest rates even than Greece. In these circumstances wantonly increasing the benefits bill by removing the two-child cap would amount to an act of sabotage.