Keir Starmer is facing renewed pressure to scrap the two-child benefit limit, as research reveals that 250,000 more children will be hit by the policy over the next year alone.
Labour’s manifesto for government, published last week, included the promise of an “ambitious strategy to reduce child poverty”, but no mention of the two-child limit.
The policy, which was introduced by George Osborne when he was chancellor, means low-income parents are denied key benefits, including universal credit, for their third and any subsequent children born from April 2017.
Research by the Institute for Fiscal Studies (IFS) finds that when fully rolled out, the policy will affect one in five children, costing families an average of £4,300 a year, or 10% of their income. Among the poorest fifth of households, 38% will be affected.
The policy already applies to about 2 million children, but by the end of the next parliament it will affect an additional 670,000, the IFS figures show.
Eduin Latimer, a research economist at the IFS, said the two-child limit had “a particularly big impact on the number of children in poverty for two reasons: it mostly affects poorer households and, by definition, its effects are entirely concentrated in families with at least three children”.
Labour’s decision not to include scrapping the policy in its manifesto has frustrated charities and anti-poverty campaigners, and become symbolic of what some see as the party’s excessive caution on tax and spend.
Pressed on the policy last week, Starmer said it had been a “difficult choice” not to promise to scrap it, but insisted his party could not make “unfunded promises”.
The IFS calculates that ending the two-child limit would cost £3.4bn a year in the long run – equivalent, it says, to freezing fuel duty for the duration of the next parliament.
“I think it’s a shame: Labour has a long history of tackling child poverty,” said Mary-Ann Stephenson, the director of the Women’s Budget Group, who described scrapping the two-child limit as “one of the most effective ways of lifting children out of poverty”.
“There are voices from across the political spectrum, the churches, anti-poverty organisations, women’s organisations, all making the same point,” she added.
