A cross-party commission including former welfare ministers is urging the government to scrap the two-child benefit limit as part of an ambitious “once in a generation” plan to lift millions of people out of poverty.
The Poverty Strategy Commission said billions of pounds of investment – including a boost to the rate of universal credit – was needed to reverse record levels of poverty in the UK, and tackle longstanding failures over rising hardship and destitution.
The commission report represents a challenge to the government as it prepares to announce its own child poverty reduction strategy, amid concerns Treasury-imposed constraints will water down any changes that push up benefit spending.
The commission said its wide-ranging proposals would lift 4.2 million people out of poverty, including 2.2 million people stranded in “deep poverty” – defined as household income at least 50% below the official poverty line and equivalent to £11,013 a year for a single parent with two children.
Labour ministers such as the welfare minister, Sir Stephen Timms, the energy minister, Miatta Fahnbulleh, and policy adviser Graeme Cooke were key members of the commission before joining the government. The prisons minister, Lord Timpson, is a commission adviser.
The independent commission was launched three years ago with the ambition of creating a cross-party consensus on tackling rising hardship. Its findings offer an authoritative mainstream policy blueprint for tackling what it has called the “societal failure” to tackle poverty.
The commission said abolishing the two-child benefit limit, which denies £3,500 a year in welfare payments to third and subsequent children born to families on universal credit since 2017, was central to reducing poverty and increasing the life chances of the poorest youngsters.
The government has resisted scrapping the two-child limit on cost grounds – estimated at £3bn a year – despite widespread opposition from Labour backbenchers, and anti-poverty campaigners. The latest figures show 1.7 million children live in households affected by the policy.
The commission says removing the two-child limit would be part of a revamped “basic minimum” social security safety net costing an extra £12.5bn a year. Under a new “social contract”, the state would guarantee protection from deep poverty to any citizen on benefits who meets agreed expectations to find work, work more hours and get higher paid jobs.
The commission’s final report, expected to be published on Thursday, is critical of the government’s attempt this year to cut £5bn from disability benefits. It said the now-abandoned plans, which would have pushed 250,000 disabled people into poverty, indicated “a failure to grasp the challenge [of poverty reduction] effectively”.
The commission estimates nearly a quarter of the UK population, including 36% of children, are in poverty. Its says its proposals, which include investment in housing and childcare, will lead to a “never-before-seen reduction in the scale and nature of poverty”.
Its membership includes figures from the political right, including Philippa Stroud, a Tory peer and former adviser to Iain Duncan Smith; and the former Tory welfare secretary Stephen Crabb. David Laws, a Liberal Democrat schools minister in the 2010-2015 coalition government, is also a member.
Stroud said the government’s proposed disability benefit changes failed because ministers “did not have a story to tell” about why they were doing them. “If you have not got a narrative on poverty then you run into the kinds of problems they [ministers] did on disability benefit cuts,” she said.
The commission did not publish cost estimates of its plans although its interim report in 2023 put the figure at £36bn a year. The commission says fiscal constraints are not an excuse for failing to tackle poverty, and over time investment in doing so would drive higher economic growth and productivity.
Helen Barnard, a commission member and director of policy at the food bank charity Trussell, said: “We are seeing more people trapped in severe and sustained poverty, turning to food banks because they have nowhere else to go. This hardship damages individuals, families, communities and the UK’s economy and public services.”
A government spokesperson said: “This government is determined to drive down poverty and ensure that every child gets the best start in life. We are overhauling jobcentres and reforming the broken welfare system to support people into good, secure jobs, while always protecting those who need it most.
“In addition to extending free school meals and ensuring the poorest children don’t go hungry in the holidays through a new £1bn crisis support package, our child poverty taskforce will publish an ambitious strategy to tackle the structural and root causes of child poverty across the country.”
