“No Government should be willing to accept” consequences of two child limit: it must be lifted – Work and Pensions Committee

In its final report of this Parliament the Commons Work and Pensions Committee is led, by evidence and facts from sources as diverse as the Institute for Fiscal Studies and senior representatives of major faith communities, to conclude that the Government must lift the two-child limit and return to providing support for all children through the benefits system.

When the Committee first reported on the two-child limit in January of this year the Government immediately accepted its central recommendation and reversed the “inexplicable” retroactive element it had intended to apply to children born before the policy was even conceived. 

In this follow up report, the Committee recognises that recommending the reversal of a major policy is not done lightly, but the two-child limit not only fails to achieve the Government's own objectives but has evident, unintended consequences that no Government should be willing to accept.

The Committee says that Government’s justifications for its policy to restrict the support provided to families through the benefits system—whether tax credits, Housing Benefit or Universal Credit—to two children are based on assumptions that “simply do not hold true”, and on a distinction between families that are in work and those in receipt of benefits that is “crude and unrealistic”. 

The Government’s central argument for the policy is that families claiming benefits should face the same financial choices about having children as families who are supporting themselves solely through work.

The Committee concluded that the Government’s arguments did not stack up: 

1. It assumes that all pregnancies are planned, and in full knowledge of the Government's social security policy. These assumptions simply do not hold true: in fact only a minority of third child pregnancies are planned. 

2. The distinction between families on benefits and those who are working is crude and unrealistic: anyone working today could lose their job, fall ill, be disabled, or be bereaved tomorrow: by the Government’s logic only the wealthy few with the financial resilience to withstand all of life's misfortunes without recourse to the benefits system could ever responsibly decide to have more than two children. 

3. The suggestion that the policy might encourage parents to increase their incomes from work is not supported by the evidence the Committee has seen. In contrast, the absence of affordable childcare, as well as the costs of transport, make it all but impossible for some families to increase their working hours to compensate for their losses, or to get back into work after having a child. 

4. The Government’s own statistics show that there is no sharp distinction between households in receipt of benefits and those in work:

Tax Credits As of April 2019: 72% of families receiving tax credits were working families (2,255,600 working families in total).

Housing Benefit As of May 2019: 28% of working age Housing Benefit claimants are ‘in employment and not on passported benefit’ 

Universal Credit As of September 2019: 33% of UC claimants were recorded as in employment (809,218 people defined as having some employment earnings in the latest assessment period)

Rt Hon Frank Field MP, Chair of the Committee, said: “Any family in this country, except the super-rich, could fall foul of the two-child limit if their circumstances changed for the worse. 

This is exactly why social security must act as a national insurance scheme covering people when they’re most exposed to hardship -  not increase it.”

A whole host of expert organisations, including the Institute for Fiscal Studies, have predicted that the two-child limit will lead to significant increases in the numbers of children living in poverty, and will push hundreds of thousands of children even deeper into poverty. The Child Poverty Action Group told the Committee “you couldn’t design a policy better to increase child poverty”. These effects will be felt more severely across whole communities in which families tend to be larger: the Committee heard evidence that Muslim and Jewish communities, Pakistani, Bangladeshi and Gypsy, Roma and Traveller communities, and families in Northern Ireland are all disproportionately affected. 

A disproportionate burden is also likely to fall on survivors of rape and domestic abuse. There is an exception for third or subsequent children conceived through rape or in a coercive relationship, but in practice only a very small number of survivors have accessed it.