Labour urged to end two-child benefits cap as research reveals policy pushing families into poverty

Keir Starmer is facing new calls to end the controversial two-child limit on benefits if Labour comes to power – as new data shows it is pushing large numbers of families with disabled children, and single parents with offspring under the age of three, into poverty.

The limit restricts child tax credit and universal credit to the first two children in most households and means families cannot claim benefits worth well over £3,000 a year per extra child after the second.

The policy was introduced by the Conservative government led by David Cameron and George Osborne as part of their drive to cut welfare spending. It had been promoted by Iain Duncan Smith, the then work and pensions secretary, who believed it would discourage people struggling with their finances from having more children. But new data uncovered by the End Child Poverty Coalition (ECPC) shows that it is hitting single parents with very young children, as well as many parents with at least one disabled child.

Analysis of official data by the ECPC reveals that 25% of all households affected by the two-child limit are currently single-parent households with a child under three years old. About 106,000 families fall into this category. The ECPC says these are parents who would not be required to work under universal credit rules.

The analysis also shows that 20% of households affected by the policy have at least one disabled child. While there are exceptions if the third or subsequent children are disabled, there are no provisions in place for the disability of other children. About 87,500 families with a disabled child are affected.

The findings will place particular pressure on Starmer to end the cap, if and when his party comes to power. The vast majority of constituencies with very high numbers of children in poverty and children affected by the cap are held by Labour MPs.

Over recent years, several shadow cabinet ministers have been severely critical of the cap. Jonathan Ashworth, when shadow work and pensions secretary, said last year: “We are very, very aware that this is one of the single most heinous elements of the system which is pushing children and families into poverty today.”

Labour’s deputy leader, Angela Rayner, described it as “obscene and inhumane”, while in 2020 Starmer himself tweeted: “We must … scrap punitive sanctions, two-child limit and benefit caps.”

But in a BBC interview last summer, Starmer said he was “not changing that policy” if Labour won power. After a backlash from the party he defended his position, saying “we have to take the tough decisions”.

Some Labour MPs with high number of constituents affected are growing increasingly impatient.

The former minister Liam Byrne, the MP for Birmingham Hodge Hill, which has the third highest proportion of children affected by the cap (26%), said: “If we want to make food banks history, then bluntly, some way, somehow, we have to end the ­appalling two-child cap – or risk losing an entire generation to the horror of child poverty.”

Clive Efford, the Labour MP for Eltham, added: “I fully understand that we can’t make commitments on financial priorities until we see the full state of the country’s finances but it is inconceivable that a Labour government would not want to address something that is such a roadblock to tackling child poverty.”

Joseph Howes, chair of the ECPC, said: “These new figures clearly show that the two-child limit is a policy which pushes single parents, and families with disabled children, into poverty – the very families that our benefit system should be helping. In this election year, scrapping this cruel policy should be the top priority for every political party.”

Across the UK, about 422,000 households who claim benefits have them reduced by the cap. One in 10 children – 1.5 million – live in a household affected by the policy. Removing the cap is widely recognised by economists and thinktanks as the most effective way to reduce child poverty. To do so would cost well under £2bn, according to most estimates. The ECPC says doing so would lift 300,000 children out of poverty and mean 800,000 would be in less deep poverty.

A government spokesperson said: “The two-child policy is about fairness, asking families on benefits to make the same financial decisions as families supporting themselves solely through work, and safeguards are in place to protect people in the most vulnerable circumstances.

“We know work is the best route out of poverty, and with over 4 million more people in work and 100,000 fewer children in absolute poverty since 2010 it’s clear our plan is working.”