Benefit cap reaction

North East campaigners have welcomed the “beginning of the end of one of the worst policies imposed on children in modern times”, after a move to scrap the two-child benefit cap cleared its first hurdle in Parliament, writes Local Democracy Reporter, Daniel Holland.

MPs voted on Tuesday in support of lifting the two-child limit and the Government hopes to ditch the controversial policy by April, though the change will be further scrutinised before becoming law.

The cap restricts families receiving child tax credit and universal credit (UC) to only claiming support for the first two children in a household, meaning younger children miss out on up to £70 per week that their older siblings get. 

Campaigners have argued that the limit pushes 109 more children into poverty every day, with around 70,000 babies, children and young people in almost 20,000 households across the North East thought to be affected.

Chair of the North East Child Poverty Commission (NECPC), Beth Farhat, said that ending the restriction would “immediately lift tens of thousands of children out of poverty across our region” in April.

The NECPC previously united a coalition of 110 organisations across the region to call on Rachel Reeves to axe the two-child limit, introduced under the Conservatives in 2017.

But it has warned that not everyone affected by it today will necessarily be better off after it is lifted.

Around 5,000 North East children live in households that are affected by both the two-child limit and the broader ‘benefit cap’, which restricts the amount of means-tested social security support a family can receive, meaning they will not benefit fully, or at all, from the upcoming changes.

Ms Farhat told the Local Democracy Reporting Service: “The two-child limit has been the single biggest driver of rising child poverty, both here in the North East and across the country, over the last decade. The legislation to end it therefore marks the beginning of the end of one of the worst policies imposed on children in modern times.

“Scrapping this policy, in full, from April will immediately lift tens of thousands of children out of poverty across our region, and will mean tens of thousands more experiencing less deep hardship. This is absolutely critical if we are to improve life chances and break down barriers to opportunity – and we should all want to do this for every baby, child and young person growing up here in the North East.

“We are grateful to every organisation we’ve worked with across the region as part of this campaign – those in business, education, faith groups, voluntary and community organisations, health, housing, trade unions, local authorities, the youth sector and cultural organisations – who came together to collectively make clear to Government that scrapping this policy for all children affected was the right thing to do for families in the North East, and for our region as a whole.”

MPs voted 458 to 104 on Tuesday, a majority of 354, to scrap the policy – with Conservative MPs and five from Reform against it.

Reform UK leader Nigel Farage had previously said he would abolish the cap, but the party now says that it would lift it only for families where both parents are British and in full-time work.

At a press conference earlier on Tuesday, he had pledged to halve VAT to 10% for hospitality businesses and introduce “staggered” abolition of business rates for pubs over four years – partly funded by a reinstatement of the cap.

Reform MP Sarah Pochin told the House of Commons that ending the two-child cap without imposing other restrictions “fails to incentivise work” and rewards “those who play the system”, but critics have branded Reform’s policy “racist”.

On a visit to Sunderland on Tuesday, employment minister Dame Diana Johnson said that Labour expected to lift 550,000 children out of poverty through the lifting of the cap and other policies by 2030.

Speaking at the Hope4All foodbank in Pennywell, she told the Local Democracy Reporting Service: “We know that children in poverty do less well at school, they are four times more likely to have mental health problems, they are more likely to become NEETs [not in employment, education, or training] as they get older, and they are less likely to have good, well-paid jobs. That is why you invest in our children now, you are investing in the future of this country.  That tells you everything you need to know about Reform, that they don;t want to invest in our children and our future, they want to make this gimmick.”