Scrap two-child benefit cap to give local councils a much-needed cash injection, Labour told

Scrapping the two-child benefit cap could give local economies a much-needed multi-million pound boost, a new report has found.

The End Child Poverty Coalition has revealed that one in nine children are impacted by the two-child limit on benefits across the UK, with families losing out on more than £3,500 annually.

But some parliamentary constituencies have much higher rates. In Hackney North and Stoke Newington, one in three children are in a family which is restricted by the two-child benefit cap.

If the policy were scrapped, the constituency would save £19m annually which it could invest in the local economy.

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Liverpool Riverside, which is the most deprived constituency in England, could gain £5.2m annually. Birmingham Ladywood could get a boost of £16m and Bradford East could gain £11m annually.

Joseph Howes, chief executive of Buttle UK and chair of the End Child Poverty Coalition said: “Scrapping the two-child limit is a crucial first step to address rising child poverty across the UK. By doing this the government could also see a boost to local economies, targeting some of the most deprived areas of the country.”

Latest government figures show that child poverty is at a record high, with 4.5 million children living below the poverty line. Proposed benefit cuts could push a further 50,000 children into poverty, according to the government’s own estimates.

According to the End Child Poverty Coalition, one child is pushed into poverty every 13 minutes as a result of the two-child limit on benefits. That is 109 children every day, and 30,000 children since Labour came to power.

It is estimated that 350,000 would be lifted out of poverty if the policy was scrapped.

“We don’t want to see another year of families suffering as a result of the two-child limit. The government must scrap this policy as part of their soon to be published strategy to tackle child poverty,” Howes said.

Cardiff East has the highest percentage of children in Wales impacted by the two-child limit, with just under one in five children here live in families impacted by the two-child limit. It could benefit by £4.5m annually if the policy was scrapped.

Belfast West is most affected in Northern Ireland with one in five children affected, and it could raise £7.5m a year. And Glasgow South West is the hardest hit in Scotland with just under one in five impacted (17%) and it could raise £4m annually.

The End Child Poverty Coalition, which is made up of 130 organisations including the Big Issue, has organised an open letter to chancellor Rachel Reeves calling for her to find the funding to scrap the two-child limit on benefits. It was written by a mother impacted by the two-child limit on benefits, Rosie, and published by the Big Issue.

The government’s child poverty strategy is set to be released in June, and ministers have promised an “ambitious” plan to address “systemic drivers” of poverty. However, it is yet to commit to ending the two-child benefit cap, which experts say is the most cost-effective way to lift children out of poverty.

Rosie, who is also the founder of Rosie’s Corner, which provides pre-owned baby and children’s clothing, writes: “This policy has to go, it cannot be scrapped for some families and not others as this would result in some of the most vulnerable families remaining in poverty – with no way to pull themselves out.

“The government has rightly committed to tackling child poverty – and we look forward to the publication of the child poverty strategy. But, for families like mine, those supported by Rosie’s Corner, and all the families impacted, this must include funding to scrap the two-child limit. We cannot wait any longer.”

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