STUC: Two-child benefit cap ‘will cause explosion' in poverty

The Herald Scotland

29-04-2025

At the moment, the two-child benefit cap prevents parents across the UK from claiming universal credit for more than two children except in some limited circumstances.
The Scottish Government has said they will mitigate this policy by 2026, however, the Scottish Fiscal Commission has said this will come with a £155 million price tag in 2026-27 before rising to £198 million in 2029-30.
Asked by The Herald if she could pin-point specific policies she believes are making life harder for working class people in Scotland, Ms Foyer said: 'The two child cap on benefits is something that is of deep regret. That was brought in by the Tory government.
"I would have expected that to be lifted by an incoming Labour Government and I think that's really quite shocking that we've not seen that happen and that will cause an explosion in child poverty because it needs to be urgently lifted.'
Despite rumours the cap could be lifted, recent reports suggest it will remain in place even when the UK Government announces their child poverty strategy in June.
This month, one Labour source told The Guardian: 'If they still think we're going to scrap the cap then they're listening to the wrong people. We're simply not going to find a way to do that. The cap is popular with key voters, who see it as a matter of fairness.'
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This comes despite the Child Poverty Action Group estimating the number of children in poverty across the UK would increase from 4.5 million to 4.8m by 2029 unless urgent action is taken.
Asked if this is a barrier to the Scottish Government meeting their own targets on child poverty, Ms Foyer said : "Yes, I think it is. Ultimately, the Scottish Government have the ability to mitigate it but they also need the budget to mitigate it.
"Partly, that relies on the UK Government upping their spending on things like welfare, public spending to get the money coming through to the Scottish budget. But the Scottish Government also has a responsibility, they according to our figures, could by inputting about £3.7 billion more resources into the budget through progressive taxation that they have the power to deliver."
The Scottish Government has previously said they are "proud" that Scotland has "the most progressive income tax system in the UK, protecting those who earn less and asking those who earn more to contribute more."
Ms Foyer also pointed to a rise in energy bills and council tax across Scotland impacting those facing poverty: 'It was ironic to see that we got a minimum wage hike from the UK Government which was welcome but it was pretty much wiped out by the council tax rises we've seen and energy bill rises we saw coming in.
'We need at a UK-level to have a serious discussion about bringing our energy into public ownership and tackling now the unaffordable energy bills that people are having to pay. It's just not appropriate that we allow the free market to set these levels. Government should be intervening and taking control of these levels."
Ms Foyer also pointed to action the Scottish Government could take to help those struggling in terms of a total upheaval of the council tax system.
"The Scottish Government needs to take action on our council tax. It is unaffordable, it is a regressive tax, it disproportionately impacts on low-paid working people and we need to see action taken to completely review that whole system and replace it."
Responding to criticism over the two-child benefit cap, a UK Government spokesperson said: 'No child should be in poverty - that's why our Ministerial Taskforce is exploring all levers available across government to give children across the United Kingdom the best start in life.
'As we fix the foundations of the economy to make everyone better off, our Get Britain Working plan and the landmark Employment Rights Bill will help people find and maintain better paid and more secure jobs with stronger rights.
"We have increased the National Living Wage and are capping how much Universal Credit can be taken for debt repayments to put more money in people's pockets and help families build a brighter future.
'Both of Scotland's governments must work together to help more people into work, while always supporting those who cannot.'
The UK Government's new Fair Repayment Rate caps debt repayments made in Universal Credit and ministers say it will allow 1.2m households to keep more of their Universal Credit award.