The benefit cap has a disproportionate impact on children, the government must end this misery

Ahead of her Lord's question on the impact of the benefit cap on child and family wellbeing, Baroness Lister writes about the topic for PoliticsHome.



With so many separate social security cuts (aka ‘welfare reforms’), it’s all too easy to lose sight of the impact each is having on child and family wellbeing. The benefit cap, which limits the total amount of benefit received by most working-age out-of-work households was introduced in 2013 at £26,000 (for families), the rough equivalent of median net earnings. It was then reduced, on a tiered basis, to an arbitrary £23,000 in London and £20,000 elsewhere. As well as saving money, the primary justification made for the cap was to change behaviour by improving work incentives.

The cap breaches an important longstanding principle: entitlement to the means-tested safety-net benefit should meet need as determined by parliament. As a recent Equality and Human Rights Commission report notes, the evidence strongly suggests it has had a disproportionate impact on children. Families with children, especially larger families and some BME families already more vulnerable to poverty, are the main victims. Children’s benefits are included in the cap even though they are also available to working families; thus, the cap doesn’t establish a level playing field between families in and out of work as claimed by the government.

The UN Committees on the Rights of the Child and on Economic, Social and Cultural Rights have expressed concern and in a Supreme Court judgement on the cap judges criticised the government for misinterpreting their duty under the UN Convention on the Rights of the Child to give primary consideration to children’s best interests.

I was prompted to table my oral question, which asks what assessment the government has made of the cap’s impact on child and family well-being, by a recent study of its effects in London by Policy in Practice (headed by one of universal credit’s architects). The study tracked 574,000 households over 19 months. It does give some support to the government’s claims about the cap’s impact on movement into paid work (albeit with considerable local authority support). However, it also underlines significant associated ‘human costs’, with a ‘considerable deterioration in living standards of affected households’. Among its findings are that 293 households moved into temporary accommodation and that 1825 children in 737 families have fallen into relative poverty.

The impact of loss of income on child well-being can be inferred from systematic analysis of the relationship between low income and children’s well-being and development undertaken by the Centre for the Analysis of Social Exclusion. According to Child Poverty Action Group estimate the cap could in future cost some lone parent families on universal credit more than £10,000 a year.

Lone parents are caught in the cap even when they are not required to look for work because of the presence of an under-three-year-old child. Policy in Practice suggest the government should reconsider the cap’s application to those not required to seek work in order to limit what they call its ‘collateral damage on the prospects and pockets of low-income households’. It’s difficult to understand what the government are trying to achieve by applying a policy designed to get people into work to a group not expected to seek work because of their caring responsibilities. Indeed, this aspect of the policy is subject to a legal challenge, which the government are resisting despite a High Court judge’s observation that ‘real misery was being caused to no good purpose’. It is high time that the government put an end to this misery.

Baroness Lister is a Labour peer.