This election has been long on moments of despair for our political culture, and short on hope for something better. The Conservatives’ attack line on Keir Starmer as a “part-time prime minister” and poorly judged, paternalistic “don’t do something you might regret” last-minute messaging are but two examples of the former. Ed Davey’s party political broadcast—the Lib Dem leader shown parenting, caring for, loving his son—was a rare example of the latter. And in yet another less depressing bit of campaigning, Angela Rayner, the 44-year-old grandmother and former care worker who is soon (probably) to become one of the most senior members of a new Labour government, sits down in a church with former prime minister Gordon Brown to discuss how New Labour policies like Sure Start changed her life as a young parent.
Since Rayner’s teenage years in Stockport, we have had two Labour prime ministers and numerous Conservative ones. The overall story for the country, as is painfully clear in this election, is one of decline. One of the biggest failures of the most recent era of Tory rule has been the sharp rise in child poverty. According to the Sunak government’s own figures, in the financial year from 2022 to 2023, 4.3m children, or 30 per cent of all children, in the UK were living in low-income households. Some 25 per cent of children were living in absolute poverty, an increase on the previous year, when the rate was 23.8 per cent. According to Department for Work and Pensions data released in March, this was the highest increase since the financial year from 1994 to 1995.
One policy that has directly contributed to this shameful trend is the two-child benefit limit, brought in by former chancellor George Osborne. Under this 2017 reform, parents can’t claim child tax credit or universal credit for more than two children. As Tom Clark recently explained, according to the government’s own data “large families were twice as likely as others to have turned to a foodbank over the past year.” Keir Starmer got into some hot political water in 2022 when he insisted that a Labour government would retain the policy, despite protest from shadow cabinet members, including Rayner. Cancelling the two-child limit has not made it into Labour’s manifesto, though Starmer did say last month that he was “not immune” from the “powerful” argument against it.
Now, new analysis from the Women’s Budget Group (WBG) thinktank, shared exclusively with Prospect, reveals that households in England with three or more children—those subject to the two-child limit—have been the most affected by austerity cuts to public services since 2010. Families with three or more children will have experienced a 16.6 per cent drop in net income and cash-equivalent value of public services since that year and projected to 2027–8, based on current government spending plans. For households with two children, that fall was 9.9 per cent. Larger households on average will have lost the equivalent of £3,681 every year from public services, compared to £2,335 for families with two children and £821 for child-free households. The analysis included cuts to essential public services, from schools, to youth services, to healthcare and housing.
According to the WBG, 46 per cent of households with three or more children are now in poverty. “It’s grossly unfair,” Zubaida Haque, WBG deputy director and head of policy and research tells me, “to treat children in the same family differently”, for the purposes of what she refers to as a “sibling tax”.
Discussion of the impact of the two-child benefit limit and austerity on households obscures the fact that they directly—and negatively—impact children. It also obscures the disproportionate impact on women, given that the majority of single parents in this country are female. Last month, the WBG released analysis showing that women in the lowest income decile in the UK will have lost 26 per cent of their income on average because of social security cuts since 2010, compared to 22 per cent of men. The fact is, says Haque, “children are poor because women are poor.”
Families from some ethnic minority backgrounds are disproportionately affected, too, says Haque, because on average they have more children, and because they tend to live in cities where housing costs are higher. According to Child Poverty Action group, 51 per cent of children in families with African and Black Caribbean backgrounds live in poverty, while 67 per cent of Bangladeshi and 58 per cent of Pakistani background children live in poverty.
Is there an equivalent policy outside of the UK? Quite the opposite, says Haque, “Children are seen as more of an asset in other countries.” She points to countries in Europe, where child benefit is more universal, more generous, and there is more investment in children.
Osborne’s policy failed on its own terms. It was intended to increase employment, but did no such thing. Nor did it discourage people from having children. And like anything in life, the policy is subject to the law of unintended consequences. “If you continue with it,” says Haque, “all that will happen is more children will get poorer.” Unless, of course, a new Labour government gets rid of it.
