Tuesday briefing: Why Labour won’t press the ‘big red button’ to lift 450,000 children out of poverty
Good morning. The two-child benefit cap has been described as “the worst social security policy ever”. It affects about 1.7 million children in the UK. Scrapping it would lift about 330,000 children out of poverty overnight, and another 150,000 by 2030. It has failed in its stated objectives: of supporting people into work, or discouraging them from having larger families. Keir Starmer himself was once committed to scrapping it. Still it clings on, driving 109 more children into poverty every day. Ahead of the budget, pressure has been growing on Starmer and Rachel Reeves to make a change to reassure left-leaning voters that a Labour government can make a meaningful difference in people’s lives. Eliminating the two-child cap could have been that: only a few weeks ago, education secretary Bridget Phillipson said the cap has had a “devastating impact”, which many understood as a sign the policy might soon be reversed. But against an ugly fiscal backdrop, Reeves will give a speech this morning with a “candid” assessment of the choices ahead – likely to mean laying the groundwork for the tax rises that now appear inevitable. And in that context, it now appears that the chancellor will stop short of abolishing the cap. Today’s newsletter with Alex Clegg, an economist at the Resolution Foundation, is about the case that she should think again. Here are the headlines. Five big stories UK news | Police investigating the mass stabbing on a high-speed train in Cambridgeshire are examining four knife incidents alleged to have taken place hours before passengers fled in terror on Saturday evening. Pornography | Porn featuring strangulation or suffocation – often referred to as “choking” – is due to be criminalised, with a legal requirement placed on tech platforms to prevent UK users from seeing such material. UK politics | Keir Starmer was briefed on details of Peter Mandelson’s relationship with Jeffrey Epstein before he decided to make him US ambassador, senior civil servants have said. The prime minister received a report that contained “a summary of reputational risks” including Mandelson’s “prior relationship with Jeffrey Epstein”. Israel | Police have arrested and detained the military’s top legal officer after she admitted leaking footage of soldiers allegedly attacking a Palestinian detainee. Yifat Tomer-Yerushalmi said she authorised publication of the video to defuse attacks on military investigators and prosecutors working on the case. Reform UK | Nigel Farage rowed back from the £90bn tax cut promise of his 2024 election “contract”, instead suggesting it had only ever been an “aspiration”. He also backtracked on the party’s pledge of a £20,000 tax-free threshold and refused to guarantee the pensions triple lock. In depth: ‘It isn’t credible to have a strategy to reduce child poverty that doesn’t touch the cap’
The two-child benefit cap was brought in by the Conservatives in 2017, and stands as one of the best-known examples of the strictures of the austerity era. The policy, introduced by George Osborne when he was chancellor, prevents parents from claiming child tax credit or universal credit for any third or subsequent child born after April 2017. That is worth about £3,500 a year for each child. According to the Resolution Foundation, removing it would cost about £3.5bn. Around the same time as the budget, the government is expected to publish its child poverty strategy. Bridget Phillipson, who is leading the taskforce producing it, seemed to drop a heavy hint that the cap might be abandoned in an interview with the Guardian last month. “I’ve been clear in public and in conversations with colleagues about what the evidence tells us and what needs to happen,” said Phillipson (pictured above left, with Rachel Reeves). “Every year that passes, because of the two-child limit, more children move into poverty and the evidence is there for all to see.” But the definition of “sorting it” now looks a bit more malleable. On Friday, the Financial Times reported that people who had been briefed on Reeves’s plans did not expect her to fully scrap the policy, but said she was more likely to adopt smaller measures that would go some way to blunting its impact. That is a shortsighted approach, said Alex Clegg, who co-authored a recent Resolution Foundation report on the subject. “We have a big red button that says, ‘reduce child poverty by 450,000’. It isn’t very credible to have a strategy to reduce child poverty that doesn’t touch the cap.” *** How do we measure child poverty? The child poverty rate is about 31% of all children, or 4.5 million, in the UK. Even after changes the government has already made – such as extending the availability of free school meals, and increasing universal credit above inflation for the next four years – it is expected to hit 34% by 2030. Because of the way benefits are increased in line with prices rather than incomes, Clegg said, “the poverty line naturally rises. That’s because earnings tend to grow faster than prices, so people in the bottom third of the income distribution, who get more of their income from benefits, fall further behind.” Crucially, that 31% is a measure of relative poverty: living in a family where income is below 60% of that in the median household. “The idea behind it is that where you are in relation to the rest of society matters,” Clegg said. “We tend to agree that living standards should improve over time. And if a family is living on an income that doesn’t improve, while everyone else around them can afford to do more things, that is materially felt. The lives of people at the bottom end should be improving, too.” *** How bad is it in the UK? An almost impossible question: what is the right amount of child poverty for a society to accept? One answer is 0%; in Scotland, a 10% target is enshrined in law, and has driven improvements (to 23%) – even if that goal is still very far away; the lowest rate in England and Wales since comparable data started to be collected was 27%, the figure the Conservatives inherited in 2010. International comparisons are hard, because many countries with a lower relative poverty rate may have a less wealthy cohort at the top of the income distribution, which changes the maths. At any rate, few would argue that more than one-third of children living in poverty by 2030 would be an acceptable outcome. “The government hasn’t said if it will have a target,” Clegg said. “But it’s worth saying that, while some of the things that might affect it may sound radical, a lot of it is reversing things that were introduced relatively recently. You could see it as extra spending, but you could also see it as going back to a system that we had not long ago.” *** How much of an impact would lifting the two-child cap have? In this excellent piece for the Comment Is Freed Substack, Ruth Patrick, a professor in social and public policy at the University of Glasgow, describes the policy as “one of the most pernicious of the long list of the Conservative’s austerity welfare ‘reforms’”, and echoes Phillipson in noting that because it is applied to children born after April 2017, the proportion of children affected naturally increases all of the time. “The key reason it’s such a big driver of poverty is the disconnect between a family’s needs and entitlement levels,” Clegg said: “Families keep growing and they don’t get any more money, and that opens up a gap quite quickly. By the time you have four or five children, it’s a huge amount of money.” While it is expensive to abolish the two-child cap, it is also a very efficient way to make a difference – costing about £7,280 per child lifted out of poverty, less than other levers available to the government. There are cascading benefits, too. “It’s hard to quantify, but people have found evidence of improving health and education outcomes,” Clegg said. “And at the more extreme end of the spectrum, the costs of deprivation show up in bills to local authorities – whether that’s temporary accommodation or crisis support. Generally, cutting the resources people get doesn’t make the need go away – it just pops up somewhere else in the system.” At the same time, he said, repealing the two-child limit on its own would be much less effective at driving down poverty than making a change in concert with other measures. His Resolution Foundation paper proposes simultaneously lifting the benefit cap, which currently limits all families on benefits (with a few exceptions, like those in which someone has a disability) to £487 a week in London and £423 a week elsewhere, no matter their circumstances; and reintroducing the link between local housing allowance and local rents, so that a greater proportion of housing costs are covered. Taken together, these measures would reduce child poverty by 1.5%, down from 31% to an estimated 29.5%. This may sound small, but against the current trajectory, that would mean 660,000 fewer children growing up in poverty. *** What is the government most likely to do? The government is very likely to announce some measures to reduce child poverty. Some of those reportedly under discussion: raising the cap from two children to three; exempting families with a disabled child from the cap; delaying the cap until the youngest child turns five; or exempting families where an adult is working. Those would provide some sort of mitigation, but still leave child poverty rising over the course of this parliament, Clegg said. Some Labour MPs are nervous about scrapping the cap at the same time as increasing taxes, arguing it will feed into their opponents’ arguments that Labour is the party of “scroungers”. But even if some voters might take that view, there is evidence that, overall, voters are more willing to endure higher taxes than major increases in child poverty. And, as Ruth Patrick argues, Labour might be better off making a bold demonstration of its commitment to improving the lives of vulnerable children than they would by quietly enacting a few measures that will still make them politically vulnerable without any of the credit. If Labour did take that step, the credit would be deserved. Beyond knock-on effects for councils and long-term education outcomes, there is a simpler calculus of whether reducing the number of children living in poverty is fundamentally the right thing to do. In a Guardian documentary last month, the journalist and poverty campaigner Terri White heard from some of those facing the impact of the policy, like a mother of two with a third on the way in Sheffield who lives in a one-bedroom home, even though her husband works full-time. “When my little girl arrives, there is no space for a basket to put her in,” she explained, her voice breaking as she spoke. “We need to eat, and we pay for fuel, working full-time, trying our best. But their policy doesn’t have a soul.” What else we’ve been reading
Until Russia’s full-scale invasion of Ukraine in 2022 drew wider attention, Transnistria was mostly known as one of those obscure quiz answers – a country in Europe that doesn’t officially exist. Pjotr Sauer and photographer Didier Bizet take us inside this breakaway state seemingly frozen in its post-Soviet past in this picture essay (pictured above). Martin Belam, newsletters team A six-week-long game of Traitors in the office: not the explanation for the UK’s productivity crisis, but the subject of Ed Campbell’s enjoyable column on a kind of workplace stress I am very glad to have avoided. Archie In 1965 the BBC commissioned – then banned – Peter Watkins’s anti-nuclear film The War Game. In a glowing tribute to the Oscar-winning director, who died last week aged 90, Peter Bradshaw recalls seeing the documentary as a teenager in the 1980s, when “it seemed as if I had entered a new era of disillusioned adulthood”. Martin Jonathan Liew’s column, he writes, comes from “the jaws of hell”: London. What emerges is a blazing defence of the values of cities against the demagogues who claim they are the armpits of the universe. Archie With the first men’s Ashes Test set for 21 November, Donald McRae talks to England fast bowler Mark Wood about managing anxiety – and why pretending to ride an imaginary horse in the outfield helps relax those around him. Martin Sport
Football | Granit Xhaka’s leveller at the start of the second half secured a 1-1 draw for Sunderland after Iliman Ndiaye’s early opener for Everton at the Stadium of Light (pictured above). Rugby | A hand injury to the full-back Freddie Steward could present Marcus Smith with a fresh chance to start for England when they face Fiji at Twickenham on Saturday. Steve Borthwick’s team will meet the Pacific Islanders in the second of four November internationals after a comfortable opening victory against Australia Football | Former England boss Gareth Southgate said after the “higher calling” of leading his nation he is not looking to return to football management, and wants to focus on working with young people. The front pages
“Reeves paves way for tax-raising budget with ‘tough choices’ talk,” is the splash on the Guardian today, while the i has: “Reeves bids to win over voters on big tax hikes as make-or-break Budget looms.” “Starmer signals ‘tough but fair’ Budget will opt for higher taxes over austerity,” is the highlight at the FT as the Mail runs with: “Reeves softens us up for tax betrayal.” “Heroes of the train horror,” says the Mirror. “Police failed to catch rail suspect a day earlier,” is the lead story on the Times, while the Metro has “‘Three missed chances to stop train knife man’” and the Star: “I grabbed his knife.” “BBC’s Trump bias exposed in memo leak,” is the headline at the Telegraph, as the Record leads with “A spike in attempted murders by kids has been linked to the gang turf war in Scotland.” Today in Focus
How Zohran Mamdani charmed New York Guardian US writer Adam Gabbatt and columnist Mehdi Hasan explore how Democratic nominee Zohran Mamdani came from nowhere to the brink of becoming mayor of New York City. Cartoon of the day | Pete Songi
The Upside A bit of good news to remind you that the world’s not all bad
Mahnoor Omer (pictured above) is aiming to upend what she describes as the “dishertening” status quo in Pakistan, where her legal challenge over the tax status of sanitary pads is making headlines. The government there exempts from tax what it calls essential goods, a category including such items as cattle semen, milk and cheese – but not an essential such as pads. Omer’s challenge aims to boost access; one study found only 16.2% of women in rural areas use sanitary goods due to their cost. “It is disheartening,” said the 25-year-old, “that despite women serving as ministers, lawmakers and public representatives, gender-blind policies continue to pass without question.” She hopes the campaign will make pads affordable and shift how Pakistani society perceives menstruation. “The problem isn’t the periods themselves, but rather the silence about them.” Sign up here for a weekly roundup of The Upside, sent to you every Sunday Bored at work? And finally, the Guardian’s puzzles are here to keep you entertained throughout the day – with plenty more on the Guardian’s Puzzles app for iOS and Android. Until tomorrow. Quick crossword Cryptic crossword Wordiply