Work being best route out of poverty branded ‘misleading claim’ by researchers

The mantra that work is the best route out of poverty is a “misleading claim”, researchers have suggested as campaigners called for no “half measures” on scrapping the two-child benefit limit.

The UK Government is under increasing pressure from anti-poverty campaigners to end the controversial policy, with expectations high for an announcement around this month’s Budget.

Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer have both hinted this week that two-child benefit cap could be lifted.

Ms Reeves has said she does not think children should be “penalised” for being part of large families, while Sir Keir has insisted he is “determined to drive child poverty down”.

The two-child limit – first announced in 2015 by the Conservatives and which came into effect in 2017 – restricts child tax credit and universal credit to the first two children in most households.

Organisations working in the sector argue that 109 children across the UK are pulled into poverty by the policy every day.

The Child Poverty Action Group (CPAG) has said scrapping the policy would be the most cost-effective way of tackling child poverty, suggesting it would immediately lift around 350,000 children out of poverty.

A new paper, by the London School of Economics and Political Science (LSE) and the University of Glasgow, states that focusing solely on raising employment will not alleviate child poverty to the extent needed.

The latest figures, for the year to March 2024, estimated there were 4.45 million children in households in relative low income – a record high since comparable records for the UK began around two decades earlier.

The researchers from LSE and Glasgow University said even if the Government’s target of an 80% employment rate was reached by the end of this Parliament in 2029/30, “this would lift only around 100,000 children out of poverty”.

‘Misleading’

They said while the “mantra that ‘work is the best route out of poverty’ resonates with many people” it is a “misleading claim”.

They said: “Changes in parental employment, whilst important, will never deliver change to child poverty rates on the scale we need to see.

“We can only get significant and lasting reductions in child poverty by investing in our social security system. There really is no other way.”

Government data, published in March, showed 35% of children in poverty are in households with all adults in work, and 37% are in households with at least one adult in work.

Just over a quarter (28%) were in “workless households”.

Professor Kitty Stewart, from the LSE’s Centre for Analysis of Social Exclusion, said: “More and more parents are in work, and working longer hours – yet child poverty continues to rise.

“This is because wages don’t adjust to family size, and because balancing paid work with care means many parents aren’t free to do the hours or take the jobs they might at other times in their lives.

“The UK needs to learn from other countries and from its own past policy successes: reducing child poverty means providing adequate support through child benefits to help families meet the temporary costs of raising children.”

The research comes as a coalition, featuring around 100 organisations representing doctors, teachers, social workers and health visitors, has signed a public statement saying the Government must scrap the two-child limit entirely.

Options

It had previously been reported the Treasury was looking at different options including whether additional benefits might be limited to three or four children, or whether there could be a taper rate meaning parents would receive the most benefits for their first child and less for subsequent children.

The Chancellor said it was important not to let the “costs to our economy in allowing child poverty to go unchecked”, in an interview with BBC Radio 5 Live on Monday.

“In the end, a child should not be penalised because their parents don’t have very much money,” Ms Reeves said.

Meanwhile, speaking to ITV’s Lorraine programme, Sir Keir – pressed as to whether the two-child limit will be scrapped – said: “I wouldn’t be telling you we are driving down child poverty if I wasn’t clear that we will be taking a number of measures to do so.”

Representatives from organisations including the British Medical Association, school leaders’ union NAHT and the Royal College of Paediatrics and Child Health are among the signatories.

The statement said: “Every day the two-child limit remains, in any form, it pushes children into poverty. Now is not the time for half measures.

“Now is the moment for the Prime Minister and Chancellor to hear the voices of the UK’s children and take this vital opportunity to do the right thing.

“Abolishing the two-child limit in full will set millions of children’s lives on a path to a brighter future, and help to rebuild a stronger, fairer country and economy.”

The Government’s child poverty task force is due to present its strategy this autumn, potentially coming around the same time as the Budget.