Thousands of Britain's biggest jobless families in line for taxpayer-funded windfalls if Labour or Reform go through with plans to lift two-child benefit cap

Daily Mail​

2 days ago

Thousands of Britain's biggest jobless families could receive huge windfalls from the taxpayer under plans to scrap the two-child benefit cap.
Labour and Reform are both pushing to ditch the policy brought in by the Tories in 2017 despite the £3.5billion cost it would incur.
Critics of the cap claim it has worsened child poverty.
But analysis of official figures shows that ditching it would hand thousands of pounds a year in extra benefits to 180,000 large families in which no one goes out to work.
Former work and pensions secretary Esther McVey last night said the figures underlined the case for keeping the cap in place.
'Encouraging people to have children that they cannot afford themselves, and expecting others to pick up the tab for them, is financially and morally indefensible,' she said.
'I expect nothing better from Labour, but it is a mistake for Nigel Farage to chase Labour to the Left.'
Ms McVey said it was 'bizarre' for Reform to want to 'expand the welfare state in this way' after voting against lifting the cap in a ballot on the King's Speech last summer.
She said the Tories were now the only party 'standing up for taxpayers and for common sense in this matter', echoing comments made by party leader Kemi Badenoch in this newspaper yesterday.
The benefit cap limits means-tested benefits like universal credit and child tax credit payments to the first two children, costing families a typical £3,455 in lost benefits for each additional child.
The Institute for Fiscal Studies has estimated the two-child cap costs affected families an average of £4,300 each.
Figures, produced by the Department for Work and Pensions (DWP), show that more than 450,000 families were affected by the cap last year.
Around three-fifths (280,000) had three children, while a quarter (120,000) had four children and 56,000 had five or more.
The DWP does not provide a breakdown of payments to the biggest families.
But separate figures held by HM Revenue and Customs show that child benefit, which is not subject to the cap, was paid to more than 16,000 families with six children, more than 5,000 with seven children and even to 15 families with 13 children or more.
Of the 450,000 families affected in total, around three-fifths include at least one adult who is in some form of work.
This leaves around 180,000 where no one in the household is in any kind of paid work.
The figures will fuel the growing political debate over whether to soften the impact of the cap or ditch it altogether.
They come a day after Mrs Badenoch accused Labour and Reform of engaging in a 'race to the bottom' over welfare.
The Tory leader said it was wrong to ask taxpayers, 'many of whom are struggling to raise their own children or choosing not to have them in the first place, to fund unlimited child support for others'.
She added: 'Welfare traps people, builds dependency and it drives up costs for everyone.'
Opinion polls show consistent public support for the cap. But the Conservatives are now the only major party defending the policy.
Dozens of Labour MPs are pushing for the cap to be scrapped as part of a review into tackling child poverty, which has now been delayed until the autumn.
One minister told the Mail there was a 'widespread feeling at all levels of the party that it is wrong to be penalising children in this way'.
Sir Keir Starmer, who is facing a wider Labour revolt on welfare, confirmed this week that the Government is looking at 'all options' to tackle child poverty, including ending the cap.
Other, cheaper options being considered by ministers include raising the cap to the first three children or removing it for all children until the age of five.
Gordon Brown is urging Chancellor Rachel Reeves to consider new taxes on gambling and the banks to fund the removal of the 'cruel' cap. Mr Farage raised eyebrows this week when he announced that a Reform-led government would ditch the cap completely.
The Reform leader – who is targeting disaffected Labour voters – said his party backed the move 'not because we support a benefits culture' but in order to help families struggling to make ends meet.
The cap applies to third and additional children born after April 2017 when the policy was introduced. As a result, the number of affected families is increasing every year. The Institute for Fiscal Studies said it was eventually likely to affect 800,000 families.