Two-child benefit cap debate highlights need for radical rethink on social welfare
On Thursday this week the Catholic Bishops’ Conference of England and Wales renewed its call for the UK government to scrap the two-child benefit cap on Universal Credit payments. The bishops have consistently argued that the policy – which is currently under review by the Government’s Child Poverty Taskforce – has been undermining the financial security of families with three or more children. Evidence shows that such families often have no choice but to make claims for Universal Credit as a result of common, but unpredictable, life events, such as job loss or the onset of disability.
In challenging times, the bishops also argue that the cap can prompt families to make difficult decisions about having new pregnancies rather than rightly valuing every new life as sacred and a blessing.
For the government the two-child benefit cap issue looks strongly like it’s going to become the second social controversy to hit a cabinet that has already divided deeply over the scrapping of the winter fuel allowance.
The cracks of revolt on the two-child benefit cap appeared almost as soon as Labour took power. Immediately following the state opening of parliament, the House of Commons spent several days debating the contents of the King’s Speech in an effort to establish the Labour agenda for the next 12 months or so.
Even prior to their General Election victory, Keir Starmer and his chancellor Rachel Reeves had been pleading that, whilst they believe the cap should be removed, there simply wasn’t enough cash in government coffers to make this possible. The prime minister sought to hold this line in the early days debate, but an amendment put forward by the Scottish National Party sought to have the restriction removed. Seven Labour MPs – who were on the maximum ‘three line’ whip to support the government – voted for the SNP amendment and suffered the wrath of Starmer as a result. With a working majority of 180 the government won the vote to retain the cap by 363 votes to 103.
For some this incident was just a minor flexing of democracy in a new Labour government, but for others it was a worrying sign of early disunity and the kind of self-destructive in-fighting that has been a characteristic of Labour on the odd occasion when it has been in power. That aside, it’s a sad and damaging irony that the two-child cap remains in effect under the stewardship of a Labour party that has the reduction of child poverty as one of the key pillars of its manifesto.
Under the current restrictions, families on benefit receive payments for their first two children, but not for any third or subsequent child born after April 2017. It’s a policy that impacts more than 400,000 UK families, with a loss to low-income families that the Resolution Foundation estimates to be £3,200 a year. The Foundation has also found that three quarters of larger families are now living material deprivation, with many suffering serious and health-damaging food deprivation. When the two-child cap was announced in 2015 27% of children in larger families lived in low-income households; after its introduction this had risen to 37% and is still rising.
It’s also vitally important to mention here that families in receipt of benefits are not necessarily families out of work. Poor regulation, aggressive capitalism and the deterioration of pay rates has meant that a significant number of fully employed workers across the UK are being paid wages that fail to raise them above even the lowest poverty marker. For a Labour government this should be its first and most profound commitment, especially in a social infrastructure where for too long those doing the jobs most critical to human wellbeing tend to be rewarded the least, and those whose jobs we can well do without are often paid the highest.
As well as impacting on the physical and mental wellbeing of thousands of hard-working parents, such deprivations have a devasting effect on children – with parents often having to make painful financial decisions affecting their children that lead to problems of marginalisation and social exclusion, with all the onward social damage than can cause.
The annual cost of abolishing the benefit cap is estimated at around the £2bn mark, out of a total annual UK government spend of £1,200bn. According to the prime minister, tough decisions such as stopping pensioners’ winter heating allowance and holding firm to the two-child cap are critical to providing the new government with enough ‘wiggle room’ to make changes to other areas of public spending that are vital to rebuilding the country. This may be the case but it’s hard to see how there can be any greater priority for any government that to ensure the wellbeing of its citizens, and especially its children, who are the future.
Unfortunately the early behaviours and revelations swirling around this new Labour government has undoubtedly convinced many that we’re simply witnessing a red reiteration of old cronyisms, and that very little of meaningful benefit is going to be relinquished from the wealthy to the poor.
“Unfortunately it is often the wealthiest who oppose the realisation of social justice or integral ecology, out of pure greed,” Pope Francis noted yesterday (20th September) during a meeting of Popular movements at the headquarters of the Vatican’s Dicastery for Promoting Human Development.
He also urged leaders to heed the “cry of the excluded,” which has the power to awaken the consciences of political leaders responsible for enforcing economic, social, and cultural rights. These rights, he noted, are recognised by most nations and by the United Nations, yet they remain unfulfilled in the socio-economic reality.
In retrospect it seems obvious that our previous Conservative government was committed to a religion of meritocracy, in a country comprised of socio-economic castes where those who floated to the top were self-evidently of greatest worth, and those who were being held at the bottom were also enacting some kind of assumed destiny of deprivation.
One might have hoped – and presumably those who bothered to voted in the General Election did – that a Labour government born out of deep socialist principles might be impassioned about overturning 14 years of that kind of social division. Sadly, it has only taken weeks for the narrative to turn from visions of a better Britain where all can prosper, to a litany of excuses and deflections about clothing allowances, Taylor Swift concerts, heating claims and cronyism across government departments. Little wonder that in Thursday’s London by-election for the seat of Harrow Road the voter turnout was a miserable 14.6%, with Labour’s Regan Hook winning the seat with just 512 votes. This ‘non mandate’ was also lauded rather unbelievably as being a resounding victory that was ‘double that of her rival’ – the Green’s Faaiz Hasan, who landed just 244 votes.
Whilst Keir Starmer’s pre-election pledge to put an end to years of “the chaos of sleaze” in government may have fallen off the rails well before the first curve, the odd £72k on outfits pales into insignificance in the face of some political perks revelations – last year there were calls for US supreme court justice Clarence Thomas to resign after it was discovered he had failed to declare 38 gifted holidays; Brigitte Macron, wife of the French President, loans her clothes free of charge from Louis Vuitton, and most outrageously in 2014 Denmark PM Lars Løkke Rasmussen came under fire for blowing £20k of taxpayers’ money on fashionable underwear.
This may all seem like so much distasteful but necessary reality when you occupy a position of power – after all no-one wants to wander about the place dressing like Boris Johnson – but what matters above all else when you lead a country is not the impression your appearance gives, but the impression your actions give. For Keir Starmer the donated clothes debacle was obviously just an annoying inconvenience – as he made clear himself: I did wrong, I hear what you say, I’ve made changes, but I’m carrying on. What the general public quite accurately read into this increasingly common ‘blameless mistake’ narrative is a profound sense of entitlement and arrogance, which is hardly likely to either endear politics to the masses, nor make them engage meaningfully with democratic processes.
Sadly, then going on to hit pensioners’ winter fuel allowances and defend the two-child cap is hardly going to convince anyone that these are just difficult decisions that need to be made if we are all to prosper. It really just comes across as yet more entitled millionaires telling the rest of us there’s nothing down for us, and it’s only going to get worse.
Quite rightly, Pope Francis also said this week that the unjust pursuit of wealth was “a destructive force, leading to perdition,” that is “irresponsible, immoral, and irrational.” This greed, he said, divides humanity and destroys creation. He also made the interesting and challenging point that wealth must be shared “not as alms” but “fraternally,” a notion which would fundamentally rewrite the longstanding British narrative that benefits for the most needy are just handouts.
More profoundly Pope Francis renewed his call for a Universal Basic Income (UBI) to ensure that no-one is deprived of basic necessities. This, he said, would not be just “compassion” but “strict justice.” The concept of UBI is a proposal that has gathered currency in recent years, as the complexity of running ever-increasing social benefits schemes spiral, and in many countries have already reached the point where it would be far cheaper to issue a standard basic benefit to every citizen instead of administering and policing a vastly complex and expensive benefits regime.
Surprisingly, support for UBI is widespread amongst UK politicians – the Greens and the SNP have on their agendas, and more than 170 MPs and peers signed a proposal calling on the government to introduce a UBI scheme during the Covid pandemic. The roots of the concept actually go back to the 18th century, and Catholic social reformers in Britain campaigned for a very similar scheme across the early years of the 20th century. In more recent times pilot schemes were run in four areas of Scotland in 2018, and plans are also under consideration in Sheffield, Liverpool, Jarrow and across Wales.
Whilst a universal assured income scheme might rattle a Labour party that is highly dependent on having as many people as possible in employment of any kind, it could deliver sufficient saving to get vulnerable pensioners through the coldest of winters, and give larger families the ability to make ends meet. Of course whether politicians would have the vision and bravery to make a decision that would change the wealth demographics of the country so fundamentally is another matter. In the meantime, as our bishops have said, dropping the two-child benefit cap would be a very good start.
Joseph Kelly is a Catholic writer and theologian