The Telegraph, 20th July 2024
It's time the Tories put family first (telegraph.co.uk)
My parents fell on hard times when I was young, so I know how compassion should be at the heart of any sensible policy
Listening to the King’s Speech, one thing struck me. For all the talk about “change” and “service”, there was one glaring omission: Labour’s refusal to scrap the two child benefit cap.
I’ve long argued it’s time for the cap to go. After all, we announced it in 2014 as a way to reduce the welfare bill. Back in 2010, we faced an economic crisis. The deficit stood at 7 per cent (now 1.9 per cent), we were in a deep recession (we now have fastest growth in the G7), public sector net borrowing was 10 per cent (now 3 per cent). We overhauled welfare through Sir Iain Duncan Smith’s landmark Universal Credit. These reforms delivered one of our greatest achievements: 4 million more people in work since 2010 and unemployment at 4.4 per cent – almost half of what it was in 2010.
The two child benefits cap means that parents can only claim child tax credit or universal credit for the first two children but not for any child subsequently born. This works out at about £600 per month in benefits to support two children and nothing more for siblings.
Having worked with vulnerable families in Fareham over the years, I can see that the cap is not working. In fact, it is costing a family on average £3,400 per year per child. According to the Joseph Rowntree Foundation, 43 per cent of children in families with three or more children were in poverty in 2021/22, with those under the age of four hit hardest, almost twice as high as the poverty rate for children in one or two-child families. This can’t go on.
There are three reasons why it is time to scrap the cap.
Firstly, it is affordable. Estimated at a cost of £1.7bn, i.e. 0.14 per cent of total government spending, we could quickly take 300,000 children out of poverty. With our growing economy and improvements thanks to Universal Credit, Keir Starmer is wrong to say this is too expensive. Goodness, Labour were recently promising £28bn on their “green prosperity plan”. Talk about getting your priorities right.
Secondly, the reason for introducing it in the first place, i.e. disincentivising poorer families from having children they could ill-afford, has not worked. The number of children born into larger families since the cap has remained largely the same. As the Select Committee for Work and Pensions found, the more children in a family, the less likely the adults are to be in work. In fact, the policy has pushed more children into relative poverty.
Thirdly, the Conservatives must reinvent ourselves as the primary party of the family. We need to support families in all their forms, or else face a crisis. As the data scientist and demographer Stephen J Shaw has set out, we should be alarmed by the UK’s cratering birth rate. Economically, we are not producing the labour market and taxpayers of the future. Socially, people are delaying parenthood too often, until too late. If we do not take serious steps to increase our birth rate, our ageing population – with the costs of pensions and care – will need to be supported by more migrant labour. And more immigration is not what this country wants or needs. At the lower end of the income scale, we should support families and children and at middle income levels, we need family-friendly tax policies, better childcare provision and improved parental leave.
I’m aware of the “only have a child if you can afford one” argument. What that really means is: “poor people should not have children”. But this is neither compassionate nor fair. Simply put, if a child grows up in poverty they are more likely to have worse educational, health and employment prospects as an adult.
My family fell on hard times when I was a teenager when my father was unemployed. It almost tore our family apart: the stress placed on my mum as the only breadwinner, the worry about paying the bills and the shame. It taught me that a job is more than just cash in hand: it’s a source of personal well-being.
Let’s abolish the two-child limit, eradicate child poverty for good and become the party of family.
