Mick Lynch nails the issue behind the two-child benefit cap

RMT general secretary Mick Lynch has nailed one of the issues behind the two-child benefit cap. Speaking on BBC Newsnight on 17 July, he said:

Two thirds of the people on two child benefit cap are in work. That means people are not being paid the full rate for the work they’re doing. What we’re doing is subsiding employers who are pushing forward low pay

The two-child benefit cap: the tip of the iceberg

This is a key problem. We need to remove the corporate welfare element of in-work benefits. 59% of the 450,000 households impacted by the cap have at least one working parent. Many of these people will work for one of the large businesses in the UK that account for 39% of jobs and nearly half of non-financial turnover.

The most profitable of these firms in particular can afford to pay higher wages without raising prices. For example, Tesco employs 326,000 people in the UK and makes profit of £6,150 per every employee (including another around 100,000 abroad). That’s a total profit of £2.7bn on everyday food – an essential – meaning Tesco could pay thousands more each year in workers’ wages.

Then there’s the difference in pay between CEOs and an average worker. The High Pay Centre found that FTSE 350 CEOs earned 57 times more than a median worker in 2022.

There are way less jobs than working age people

Another issue with the two-child benefit cap is the impossibility of employment for everyone working age in the UK under a ‘free market’.

There are 934,000 vacancies in the UK compared to 1.5m people unemployed and 9.4m classed as  ‘economically inactive’ (also unemployed but not seeking a job in the past month). And that’s before one gets to the problem of whether these people have the skills for the vacancy. So under neoliberal capitalism, unemployment is a guarantee for many.

The SNP tabled an amendment to the king’s speech calling on Labour to scrap the two-child benefit cap. SNP Westminster leader Stephen Flynn said:

It’s shameful that Keir Starmer has made the political choice to continue imposing Tory austerity cuts

The two-child benefit cap is a disgraceful policy that doesn’t account for the reality of the free market.

Featured image via BBC Newsnight