Keir Starmer and the Labour Party government’s decision to keep the Tories’ two-child benefit cap has plunged 10,000 children into poverty since the election, analysis from the Child Poverty Action Group (CPAG) shows. That’s 109 children every day since 5 July.

The cap strips benefits such as child tax credits and Universal Credit from low income families for their third or subsequent children born after April 2017.

Two-child benefit cap: scrapping it an ‘investment’

Scrapping the two-child benefit cap is an investment in a child’s future that, in turn, benefits the whole of society. In the UK, children born in the poorest fifth of families are 13 times more likely to experience ill health by the age of 17.

As Joseph Rowntree Foundation principal policy adviser Katie Schmuecker said:

Not only is this morally the right thing to do, it will also begin to build greater economic security for households, taking some pressure off public services and strengthening our economy.

Children from the lowest income families are also five times more likely to experience poor academic achievement.

15 year old Amara told CPAG:

I skip meals to share with my mum…for example, I skip my meal to wait for her to come back and at least we can have the same amount of food…[We] starve together through the whole day, so at least we will have had something to eat.

Save the Children called the new CPAG figures “heartbreaking” and Starmer’s decision to keep the two-child benefit cap “cruel”. CPAG further noted that scrapping the policy would bring 300,000 children out of poverty and reduce poverty for 700,000 more.

Chief Executive of the charity, Alison Garnham, said:

The clock is ticking while child poverty rises – and the two-child limit is the key driver of the increase. Scrapping it is the most cost-effective way to stop more kids being pulled into poverty on the Government’s watch.

Corporate profits are major benefit recipients

It’s also worth noting that many people who are under the two-child benefit cap are in work. 59% of the 450,000 households impacted by the cap have at least one working parent.

As the Canary previously reported, this is corporate welfare. The most profitable 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.

It’s further a consideration that low income families will necessarily spend the benefit money in the economy. This circulates money in society and increases tax revenues.

Although, shareholder profits on basic utilities will cream off a significant portion of the benefit money, such as through increased water, internet and energy bills. This is another aspect of the argument for public ownership of such essentials, as proposed in former Labour leader Jeremy Corbyn’s 2019 manifesto. Such action would reduce the cost of the benefits bill.

So when Starmer and Labour say we cannot ‘afford’ public ownership or to end the two-child benefit cap, the truth is we can’t afford not to.

Featured image via Channel 4 News – YouTube

By James Wright

This post was originally published on Canary.