JRF poverty report a “Stark reminder more investment in social security needed by every level of government” say campaigners

New analysis from Child Poverty Action Group (CPAG) show 10,000 children pulled into poverty by two child limit since Labour took office

Responding to the publication today (Monday 7th October) of the Joseph Rowntree Foundation (JRF) Poverty in Scotland report, John Dickie, Director of the Child Poverty Action Group (CPAG) in Scotland said;

“This report is a stark reminder that it is children who are at greatest risk of poverty and that more investment in social security is needed at every level of government. Here in Scotland the Scottish child payment is making a real difference to the lives of children and families and the new UK government needs to make similar investment. But the Holyrood government must also go further to uprate the Scottish child payment’s real terms value if legally binding child poverty targets are to be met. All the evidence is clear that economic growth and increased employment in themselves won’t deliver the reductions in poverty that children and families so desperately need to see.”

10,000 children pulled into poverty since Labour took office – over 100 children every day

New Child Poverty Action Group (CPAG) analysis also published today finds 10,000 children have been pulled into poverty across the UK by the two-child limit since the Labour government took office.  That’s 109 children each day since July 5th.

Mr Dickie continued

“The new UK government really needs to step up to the plate and deliver on its child poverty commitments. Scrapping the two-child limit is the most cost-effective way to stop more children being pulled into poverty on its watch.  We welcome its child poverty taskforce, but the damage grows every day - the two child limit must be abolished in the upcoming Budget.”

The new reports follow the publication of analysis by the Institute for Fiscal Studies IFS last week that concluded:

  • “the single most cost-effective policy for reducing the number of children living below the poverty line is removing the two-child limit” and that
  • “neither increases in the minimum wage nor widespread increases in employment are likely to be well targeted at low-income households or to give large income gains to those who do benefit.”

ENDS

Note to editors:

The new JRF report, Poverty in Scotland, can be found at https://www.jrf.org.uk/

The latest IFS child poverty analysis (published 3rd October)  can be found at https://ifs.org.uk/publications/child-poverty-trends-and-policy-options

The two-child limit denies child allowances in universal credit (UC) and tax credits worth up to £3,455 per year to third or subsequent children born after April 2017. Abolishing the two-child limit is the most cost-effective way to reduce child poverty which is at a record level ( 4.3 million children in poverty).

Previous CPAG estimates show scrapping the two-child limit today would instantly pull 300,000 children out of poverty – 15,000 of them in Scotland alone -  as well as reducing the depth of poverty for 700,000 more.   

DWP statistics show 1.6 million children are currently affected by the two-child limit.  That’s one in nine children (including all children in a household affected by the policy rather than only third or subsequent children who are not eligible for child allowances in universal credit or tax credits).  59% of families affected by the policy have at least one working parent.  62% of affected families have three children, 25% have four and 12% have five or more.

Methodology note for calculation of the 10,000 figure.

  • The calculation uses the underlying data from Households Below Average Income, the source of official poverty stats
  • This data is inputted to UKMOD (tax-benefit microsimulation software) which looks at reported household characteristics, reported level of earnings, reported amounts of benefits received etc to calculate benefit entitlement
  • Removing the two-child limit is then run through the software  to estimate its impact on poverty and government spending compared to the status quo
  • For future years assumptions are made about factors such as earnings growth/benefits uprating/characteristics of households and the same before/after calculation is done
  • These calculations give the per-year effect which are then divided to get the figure for the period since July 5th 2024.