Children in families hit by 2-child limit also lose most from cuts to public services, finds the WBG

New analysis published today by the Women’s Budget Group finds that households with 3 or more children (which are hit hardest by social security cuts, and particularly the two-child limit) are also those that are most affected by cuts to public services since 2010 (projected to 2027/28 based on current government spending plans).

Our analysis shows:

• Households with 3 or more children (which are hit hardest by social security cuts, and particularly the two-child limit) are also those that are most affected by cuts to public services. Households with 3 or more children lose on average (cash-equivalent) £3,681 per year from public services compared to £2,335 for households with 2 children and £821 for households with no children.
• Households with 3 or more children see an astonishing fall in living standards by 16.6% due to combined impact of tax, benefit and public services between 2010 and 2027/8. Households with 2 children also see a significantly large drop: 9.9% fall in living standards (i.e. net income plus cash-equivalent value of public services). Households with no children see a 5.6% fall in living standards.
• The two-child limit/benefit cap is contributing to poverty (46% of households with 3 or more children are now in poverty) among households with 3 or more children. The impact is disproportionate on the poorest 10% of households and on Black and Minority Ethnic groups (particularly women).

Commenting on the findings, Dr Zubaida Haque, Deputy Director and Head of Policy and Research said:

“As a society we all benefit from people having and raising children. These are the very people who will look after us in our old age; these are the people whose earnings will pay tax for our pensions in our old age.

“Children are clearly a contribution to our society and future economy, yet currently we have a social security system where children in households with 3 or more children are being punished twice – firstly by the two-child limit on benefits and secondly by cuts in public services – including cuts to early years services, schools, transport and youth services. It’s unforgivable to penalise children – to attach a sibling tax to them – for decisions entirely outside their control.

“It is grossly unfair to treat children in the same family differently, simply because some children were born after April 2017. How is it fair that third or subsequent children in the same family born after April 2017 receive significantly less in benefits than their older siblings?

“The two-child limit policy punishes children born in larger families through no fault of their own, and it is massively contributing to poverty, including child poverty in households with 3 or more children. Things will only get worse unless this policy is scrapped by the next government.”

Notes to editors

• Analysis carried out by Howard Reed, Director of the economic research consultancy Landman Economics and Senior Research Fellow in Public Policy at the University of Northumbria.
• Figures above are for England only.
• Public services in the analysis above include:
• Schools (primary and secondary)
• Early years (including subsidised childcare places (e.g. at nurseries) and Sure Start)
• Youth services (e.g. local authority-funded youth clubs)
• Healthcare (NHS services)
• Social care (local authority funded care services)
• Housing (subsidy for social housing and associated services)
• Transport (trains, buses, tube/trams, roads spending)
• Police and criminal justice system

A “total” figure is calculated for public services which is the sum of all 8 categories.