Labour’s £3bn DWP cuts could plunge a third of ALL children into poverty

The Labour Party government is not only set to fail its key pledge to end child poverty – it’s actually going to drive rates to record highs. That is, it’s going to plunge over 130,000 more children into poverty. In other words, by the end of Labour’s time at Number 10, 4.4 million children – a third of all in the UK – will be living in poverty. Think tank the Resolution Foundation has published these scandalous new estimates. Unsurprisingly, it has underscored that there’s one notable obvious cause of these soaring child poverty rates: Labour’s planned Department for Work and Pensions (DWP) welfare cuts.

And of course, the government’s refusal to scrap the two-child limit on benefits is a core part of this.

Child poverty to reach a staggering 4.6 million under Labour

Notably, on 26 February, the think tank released a new report. This warned that:

the roll-out of £3 billion of previously announced benefit cuts will contribute to an increase in child poverty rates from a projected 31 per cent at the start of the Parliament (2024-25), to 33 per cent by the end (2029-30), meaning the number of children below the poverty line would rise to an all-time high of 4.6 million.

Labour’s chancellor Rachel Reeves and DWP ministers have repeatedly confirmed that the government intends to follow through with these enormous cuts to welfare.

However, it has not been forthcoming with much of the details on how it plans to do this. Its disability Green Paper is due in March. This will lay out where and how Labour will make some of these cuts.

As the Canary has been reporting, this is likely to revolve around dangerous reforms to the Work Capability Assessment (WCA), and Personal Independence Payment (PIP).

Overall though, there was one particular policy that the Resolution Foundation’s report was scathing of in particular. This was the two-child benefit cap.

The Labour government has continued to refuse to ditch the two-child limit on benefits. However, it was this that the Resolution Foundation’s new report pointed the finger at as a key driver in the spiralling rates of child poverty the party is set to foment.

Tinkering around at the edges of the DWP two-child benefit cap won’t do

In October, the Child Poverty Action Group (CPAG) revealed that the DWP two-child benefit cap had pushed more than 10,000 children into poverty. Notably, this was since the election and equated to 109 children, every day, since the 5 July.

In Spring, Labour’s Child Poverty Taskforce will publish the government’s key child poverty strategy. According to the Times, some Labour MPs have been pushing prime minister Keir Starmer to drop the cap as part of this.

Ministers are also purportedly having discussions about tinkering around at the edges of the cap too. Some are suggesting the government could raise the cap to three children, as an interim measure.

The Guardian has also reported that ministers are mooting the possibility of exempting parents of under-fives from it.

However, the Resolution Foundation’s report has made clear that raising the cap is the single-biggest policy move the government could make to curb child poverty.

Crucially, its estimates set out that it would lift:

500,000 children out of poverty by the end of the Parliament at a cost of £4.5 billion. With the policy costing around £10,000 for every child lifted out of poverty, this is by far the most effectively targeted route to reducing child poverty

By contrast, it noted that the proposal to raise the cap would lift far fewer children out of poverty. The think tank calculated it would alleviate poverty for just 320,000 children in comparison.

Reverse cuts, restore, and roll out more DWP welfare, not less

The think tank also made the case that rather than pursuing a policy platform of DWP welfare cuts, it’s precisely the opposite the government needs to do in order to end child poverty.

Its report detailed that the other measures vital to tackling it are:

• Extending free school meals to all families on Universal Credit. Cost: £1.2bn. Outcome: 100,000 children lifted out of poverty.
• Restoring and boosting the family element of Universal Credit, and re-linking Local Housing Allowance to local rents. Cost: £3bn. Outcome: 140,000 more children no longer living in poverty.

Together with ditching the two-child benefit cap, these would lift around 900,000 children out of poverty.

Notably, this would be by the end of this parliament. It would result in the child poverty rate falling to 27% – the lowest levels since the 1980s.

Child poverty need ‘more than warm words’

Principal economist at the Resolution Foundation Adam Corlett said of its findings:

With a record 4.6 million children set to fall below the poverty line by the end of this Parliament, the Government is right to be formulating a new strategy to combat this scourge of modern Britain.

However, a credible new strategy will need more than warm words. A Government that is serious about reducing child poverty will need to undo some of the policies announced by previous governments, such as scrapping the two-child limit. The upcoming Spending Review should also look to extend free school meals to more families.

An ambitious strategy could support around 900,000 children out of poverty by the end of the decade. And while the cost of this action may seem daunting, the cost of inaction is far greater and could leave the Government with an embarrassing record of rising child poverty.

The think tank has given the government a clear roadmap to meet its pledge on ending child poverty. However, it has also demonstrated that on its current trajectory, it is set to only entrench child poverty even further.

What’s clear is that the Labour Party won’t even get to the starting line of tackling it with its DWP benefits cut agenda in play.

Featured image via the Canary