Few policies attract such depths of contempt and anger in progressive circles as the two-child benefit limit, which, six years after its introduction, has proved to be every bit as malicious and incompetent as its critics predicted, and as such has become the surprising centre of a bitter internal Labour party row over whether it should be abolished.
After Labour’s policy forum over the weekend that dispute is at an impasse. The leadership remains implacably committed to keeping the two-child limit, at least publicly, as part of an iron devotion to spending discipline. MPs and activists remain in hurt, baffled despair that the party will not openly signal it will ditch this most despised of policies.
The row may have gone eerily quiet, but the assumption among anti-poverty activists is that a Labour government promising to be “laser-focused” on addressing poverty will inevitably have to confront the issue at some point. “If you are going to promise you will tackle child poverty, then you cannot do anything other than scrap the two-child benefit limit,” said one campaigner.
Abolishing it is a policy that unites left and right of the party. It is seen as low-hanging fruit policy-wise, at least compared with the vast investment needed to fix the broken social security system. Scrapping it would help tens of thousands of struggling families and burnish Labour’s anti-child poverty credentials at a relatively modest cost of £1.3bn a year.
Its removal would also be powerfully emblematic after years of austerity. “The two-child limit is seen as totemic of an era of policy and rhetoric around social security,” said Tom Pollard, the head of social policy at the New Economics Foundation thinktank. “It’s also regarded as a particularly nasty bit of policy and it was assumed [in the wider party] that Labour would take care of [get rid of] the nasty policies.”
The two-child limit was classic austerity politics, masterminded in 2015 by the Tory former chancellor George Osborne. The supposed aim was behaviour change – to bring to heel imagined regiments of lazy, recklessly breeding welfare kings and queens and force them to get a job – all the while providing cover for unprecedented welfare spending cuts of £12bn a year.
The idea was to incentivise a kind of procreational discipline: families in receipt of tax credits or universal credit would be denied additional support for third and subsequent children born after its introduction in 2017 (households affected currently lose £3,325 a year per child). Feckless low-income families, proclaimed ministers, would face choices: they would learn that “children cost money”.
In practice, it signalled its harshness when it emerged that mothers of third or subsequent children born as a result of rape would, humiliatingly, have to sign forms testifying to their assault to gain exemption from the two-child limit penalty. (Researchers have found many women choose to go without rather than fill in the form and relive their trauma in this way).
Appalled by the “rape clause”, the SNP MP Alison Thewliss called the two-child policy “one of the most inhumane and barbaric policies ever to emanate from Whitehall”. A few months later, looking at the policy in the round, the eminent social policy professor Jonathan Bradshaw declared it “the worst ever social security policy … morally odious, vindictively conceived”.
Repeated evaluations have proved them right. It has failed to persuade poor families to “breed” less (fertility rates have barely shifted) and work more hours. In practice, its main function, according to one recent study, has been to push working families into poverty (more than half of those affected by the two-child limit are in work) and make it less likely non-working parents moved into employment.
About one in 10 of all UK children (1.5 million) are currently affected by the two-child limit. Of these, 1.1 million are in poverty. According to the Child Poverty Action Group, abolishing it would be the most cost-effective way of reducing child poverty – it would lift 250,000 children above the breadline, and a further 850,000 would be would be pulled from deep poverty.
Bradshaw told the Guardian the past six years had sadly proved correct his original assessment of the two-child limit as a uniquely bad policy (worse even than the 1834 Poor Law Amendment Act, which introduced workhouses). His only prediction yet to come to pass was that it would not last. He remains optimistic: “It’s so clearly wrong, unjust and discriminatory. It’s causing havoc, increasing poverty.”
Even David Freud, the Tory minister in charge of welfare reform at the time the two-child limit policy was being prepared, no longer defends it. He dismissed it as “vicious” and an “excrescence,” at a rightwing thinktank seminar last year. It was uncomfortable to deliver and ended up increasing child poverty, he explained to the Guardian. “It’s not a very good policy,” he said.
Lord Freud, who previously advised Tony Blair on welfare under New Labour, said he “didn’t read too much” into Keir Starmer’s refusal to abolish the policy. Now was not a good time to make spending promises. But even if the Labour leader got his way now, the party will inevitably have to address the issue he predicted: “It’s bang, slap Osborne austerity that Labour is looking at, nothing else.”
