It’s obviously a bit early to start passing judgement on Keir Starmer’s time in government but what we do know already is that he intends to bring in an awful lot of new laws. Indeed it was almost possible to detect the King’s voice starting to falter as he read them all out to Parliament on Tuesday. Everything from changing the planning rules to giving workers more rights to giving everyone a better bus service. But there was one glaring omission.
It did get a mention but what it did not get was the promise of legislation. And that omission could ultimately wipe out all the brownie points Sir Keir will have earned with many of his backbenchers and indeed much of the public. He did not promise to scrap the cap on child benefits.
The cap means that universal credit is restricted to two children. With very few exceptions parents cannot claim it for a third or subsequent children. It was George Osborne who introduced it when the Tories were in power. It saves the Exchequer £2.5 billion a year. Starmer wants to keep it for the same reason.
But around 1.5 million families are affected by the cap and, by definition, they are amongst the poorest families in the land. Many on the left of the Labour party believe that is simply unacceptable. And not only those on the left. Gordon Brown, a former chancellor himself of course, says the cap must be scrapped.
What Sir Keir has offered instead is a child poverty taskforce - a joint enterprise between the work and pensions department and the education department – and the promise that poverty will fall as the economy grows stronger. That, of course assumes there will be enough growth and that it will happen soon enough to quell any potential rebellion.
Yet this is about more than a single benefit - however important that may be to the individual families concerned. It raises the fundamental question of the extent to which parents can or should be able to rely on the state to help pay for the rearing of their children – however many they may choose to have.
The columnist Sarah Vine (now divorced from the former cabinet minister Michael Gove) is herself a mother of two. She wrote a powerful piece for the Mail which began with what she called a “trigger warning”. It said: “This column may contain several politically incorrect opinions. In particular, Keir Starmer should ignore all the hand-wringing and lobbying — and stick to his guns on the two-child benefit cap. Not only does it make sense financially — saving the Exchequer billions — it also makes sense culturally and politically.”
Her argument is that having children is becoming a luxury: “The only people who can afford to have big families these days are either the very wealthy — or those who are happy to milk the welfare state for every last penny. For the middle-classes, two is usually as far as they can stretch. Three is a real push — especially if both parents work, which is invariably the case. It’s virtually impossible to buy a home on a single salary, and childcare is often insanely expensive. Many young couples are swearing off having children altogether…. No wonder the birth rate among middle-class couples is plummeting: it just doesn’t add up for them.”
This, claims Vine, is a disaster waiting to happen because the middle classes provide this country’s financial backbone and without them and their hard-working progeny, there will be no one to pay for everyone else.
As for the rich? Well, says Vine, they can pay their own bills, and “if they want to spend their money on armies of little Johnnies and Mirandas, that’s their business. But for children whose parents — or parent — have no other means of support, it’s up to the state to provide it. And rightly so. No child should have to suffer as a consequence of their parent’s poor choices, even if far too many do. It the mark of a civilised society that every child should have an opportunity in life, regardless of their background.”
But, Vine warns, it’s not always that simple: “For years, and especially under the last Labour government, a system that was intended to help people in times of hardship morphed into a kind of career choice — one that positively incentivised people to turn children into commodities to reap state benefits. It was a clever ruse to lock in Labour voters.... But while limitless child benefits gave Labour a political advantage, it didn’t necessarily translate into an advantage for those receiving them.”
But surely it has achieved its primary objective which was, let’s remember, to cut state spending?
On the contrary, claims Vine, it has actually made things worse. That’s because it has been “breeding a long-term culture of state dependency that straddled multiple generations and devalued whole communities, as well as stifling ambition and leading to a raft of other problems….People are still having kids they can’t afford, and they are still the kind of people who already place the highest burden on the welfare state.”
If she’s right about all that, then surely it makes sense for Starmer to reverse the policy and get rid of the cap? Quite the opposite, she says, and here’s why: “The blame for this rests firmly on the shoulders of the Tories, and that’s something he can exploit… It’s one less tough decision for him to make — and there are going to be plenty in the weeks and months to come.”
Kim Johnson is one of the many Labour MPs who take the opposite view. Her leader, she says, must scrap the cap now and she has threatened to move an amendment to the King’s speech to put pressure on him to do so. She points to figures from the Department for Work and Pensions released last week which show that the cap on benefits now “impacts a shocking 1.6 million children, driving their families into desperate poverty. In my own constituency of Liverpool Riverside – the most deprived in the entire country – one in every two children live in poverty.”
Liverpool may be the worst but the poverty is widespread and affects 4.3 million children. One in nine of all children now living in a household whose income is restricted by the cap. There is a strong positive correlation, says Johnson, between levels of child poverty in an area and the number of families hit by the cap. Scrapping it, she claims, would lift 500,000 children out of poverty overnight, at the cost of roughly £3.4 billion per year.
She says: “In the sixth richest economy in the world, no child should be living below the breadline. Economists and anti-poverty campaigners alike have said that scrapping the two-child cap on benefits would be the most cost-effective and impactful way to immediately alleviate child poverty in this country.”
After the last Labour government was formed in 1997, Johnson worked for six years setting up Sure Start centres across the North West to tackle child poverty and inequality. There’s no doubt, she claims, that their ambitious targets on child poverty were transformative to the lives of millions of children. Now, she says, the current cost of living crisis is “adding unbearable pressure to an already critical situation for many families who are struggling to make ends meet. Children are incredibly aware of the stigma of poverty and inequality, and the pressure of this can have lifelong psychological effects on top of the material impact on educational attainment and life chances and associated health problems.”
So where do you stand? Perhaps the simplest question to answer is the strictly financial one. Can the country afford the cost of removing the cap? Should it be a priority for this new government?
The trickier question, as posed by Sarah Vine, is whether parents are more likely to have bigger families if the state helps out financially? And if they do, is that good or bad?
Let us know.
