Rachel Reeves has announced that she’ll finally lift the two-child benefit cap in her crushing autumn budget.
This is probably a good thing, given that third and fourth children also need to eat food and, you know, subsist. Early reports indicate this may even be true of poor children, though, oddly, we have no definitive data on that.
Kemi Badenoch, in a rare display of cross-party unity, explains how budgets work:
On Wednesday, Starmer and Reeves are going to increase your taxes to fund more welfare.
However, the chancellor seems to have missed the point entirely. Continuing on with Labour’s now-familiar definition of centrism (being unable to do something good without a pointless lurch to the right), she’s apparently planning to fund the lifting of the cap … by cracking down on benefits fraud.
This has lead several key public voices, including the Green’s Zack Polanski, Unite’s Sharon Graham, and a gaggle of climate activists swarming the Treasury to ask: Would you please try taxing the rich?
No good policy goes unaccompanied
Scrapping the two-child benefit cap has a host of accompanying positives and drawbacks.
One the one hand, losing the cap would immediately improve the welfare of around 1.6 million kids. It would even lift half a million children out of relative poverty, according to charity group Save the Children.
However, there are downsides. Last year, Labour removed the whip from seven rebel MPs who voted to scrap the cap. At the time, the so-called party of the working people was dead-set on the idea that having three or more kids was a social evil. Scrapping the cap at this point risks making it look like those seven MPs could have had a point.
Moreover, the massive social good of lifting kids out of poverty would come at a cost of £2.5-£3.6bn, according to think tank the Resolution Foundation. But hey, who’s to say it’s wrong to stop punishing children for having siblings after all?
‘We will never tolerate fraud, error’
Never fear, because Rachel Reeves has a plan. The Treasury will find all that money by ploughing even more money into checking that people aren’t taking too much money. A Treasury source explained:
We will never tolerate fraud, error or waste in the welfare system – every pound of taxpayers’ money should be spent with the same care with which working people spend their own money.
That’s why the chancellor is doubling down on this next week – extending targeted case reviews to save taxpayers billions and ensure help goes to those who genuinely need it, and safeguard taxpayers’ money so it can be invested in the public services we all deserve.
Of course, this strategy depends on a few, shall we say, bold assumptions:
- There are actually benefits cheats out there who are regularly getting away with nicking £3bn.
- Previous governments’ massive crackdowns on benefits fraud missed the cheats nicking off with £3bn.
- This current government is just so damn competent that it will definitely find the £3bn benefits cheats this time.
- Finding the hypothetical £3bn benefits cheats will definitely cost significantly less than £3bn in benefits-cheats hunters.
If even one of these assumptions is wrong, Reeves finds herself in the unfortunate position of looking like she was trying to demonise the growing number of people UK’s living below the poverty line as a bunch of freeloading frauds. Its a heck of a gamble, but if anyone can pull it off, Reeves could maybe.
Just in case that one fails
Of course, Reeves’ plan will definitely work, probably. However, just in case handing the Department for Work and Pensions even more money to torture poor people doesn’t actually result in net fiscal benefit, several people have suggested that the UK maybe starts by taxing people who definitely have money.
Now, we acknowledge that Reeves is sick of people mansplaining the budget to her. You have to respect the first woman to be appointed Chancellor, just as Margaret Thatcher effectively utilised girl power by funneling money into illegal paramilitary death squads in Northern Ireland.
As such, our suggestion to tax the people who have money comes from Unite general secretary Sharon Graham:
The chancellor’s continued failure to ensure the super-rich pay their fair share is a misstep. The 50 richest families in Britain are worth £500 billion. A one per cent tax on the richest one per cent would create £25 billion. Black hole gone and vital money in to support and enhance the UK’s public services.
[…] The government has tied itself in knots in picking the pockets of pensioners, cutting the winter fuel payment while the mega wealthy remain virtually untouched. That is unfair and simply wrong. This issue will not go away as winter approaches and Unite will be leading the challenge for it to be reversed.
‘A political choice’
Party leader Zack Polanski (regrettably a man), backed by the rest of the Green Party (several genders), also gave similar suggestions:
It is a political choice to keep children in poverty whilst billionaires and multimillionaires get richer […] Our country is and has been for a long time now at breaking point. Life has become literally unaffordable for millions of people. People are angry, and I get it, our communities deserve so much better […] But instead of facing this reality head-on, this Labour government, like the Conservatives before it, has stood by whilst the 1% get ever richer at the expense of ordinary people.
The Greens suggest that implementing even a 1% tax on wealth over £10m, increasing to 2% over £1bn, could raise as much as £14.8bn. This would pay for the lifting of the two-child as many as five times over, possibly allowing for untold numbers of children even beyond three or four.
However, just in case the Greens’ suggestion wasn’t loud enough, activists from campaign group Climate Resistance are currently conducting a disruptive protest directly outside the Treasury itself. They’re also calling for increased taxes on the super-rich.
‘Hoarding obscene wealth’
The demonstrators are holding banners, chanting, and picketing the Treasury’s entrance. They’re arguing that a well-designed wealth tax could raise billions to fund public services, support a global just transition, and pay long-overdue climate reparations to countries in the Global South.
Climate Resistance spokesperson Sam Simons stated:
This budget is set to make life harder for millions while allowing billionaires to continue hoarding obscene wealth. This government refuses to tax extreme wealth even as our public services collapse and climate disasters escalate. Britain deserves better than a government bought by billionaires.
Abolishing billionaires isn’t radical: it’s common sense. Extreme wealth is incompatible with a safe climate and a fair society. Ordinary people are paying the price for a crisis caused by a handful of ultra-rich profiteers. That must end.
The group’s Abolish Billionaires campaign calls for a transformative wealth tax aimed at taxing billionaires out of existence, redistributing extreme wealth to fund climate action, strengthen public services, and build a fairer society.
Now, it’s true that we aren’t yet privy to the entirety of the Chancellor’s plan. The budget will come on Wednesday, and with it a chance to see Labour’s priorities in action.
However, just in case Reeves is still looking for suggestions: could we maybe try taxing the rich?
Featured image via the Unsplash and the Canary
This post was originally published on Canary.