The government’s recent reversal on welfare reforms has made spending decisions “harder,” according to the education secretary, who refrained from committing to the removal of the two-child benefit cap.
Bridget Phillipson stated on BBC One’s Sunday With Laura Kuenssberg that ministers are “looking at every lever” to alleviate child poverty.
However, she cautioned that abolishing the cap would “come at a cost,” while emphasizing the government’s ongoing support for families through various cost-of-living measures.
This follows a rebellion among Labour MPs that significantly weakened a package of proposed welfare reforms, initially projected to save £5 billion annually by 2030.
The scaled-back reforms imply that these savings will be delayed or forfeited entirely, placing added pressure on Chancellor Rachel Reeves ahead of the upcoming autumn Budget.
Prior to the benefits policy adjustment, the Labour government had been considering lifting the two-child benefit cap, a policy that restricts means-tested benefits to a maximum of two children per family born after April 2017.
According to data from the Department for Work and Pensions, approximately 1.6 million children reside in households impacted by the cap.
The Institute for Fiscal Studies estimates that eliminating the policy would cost the government around £3.4 billion annually and lift 500,000 children out of relative poverty.
When questioned by Kuenssberg about whether the likelihood of abolishing the cap had diminished, Phillipson stated, “The decisions that have been taken in the last week do make decisions, future decisions harder.”
“But all of that said, we will look at this collectively in terms of all of the ways that we can lift children out of poverty.”
Phillipson and Work and Pensions Secretary Liz Kendall are co-leading a child poverty taskforce that is examining the potential removal of the cap, among other policy options.
The taskforce is expected to release a strategy for reducing child poverty in the autumn.
The government initiated the taskforce last year, amid pressure from opposition parties and some Labour MPs to scrap the two-child benefit cap.
Significant support remains among many Labour backbenchers for lifting the cap, particularly among those who strongly opposed the planned welfare cuts.
In May, Phillipson indicated that “nothing is off the table” when asked if the government was considering lifting the cap.
However, speaking to the Guardian newspaper on Friday, Chancellor Rachel Reeves stated that she was “not wedded to any specific policy” aimed at reducing child poverty.
In that interview, Reeves asserted that it would be “irresponsible” for a chancellor to rule out tax increases and noted that “there are costs to what happened” regarding welfare.
Phillipson echoed a similar sentiment on the Sunday with Laura Kuenssberg program.
The cabinet minister stated that scrapping the two-child benefit cap “does come at a cost, and that’s why, in keeping with our fiscal rules, we do need to make sure that we have a strong foundation for the economy.”
Phillipson emphasized that while the cap was “an important consideration,” it was “not the only way that we are supporting and will support families,” highlighting the expansion of family hubs, free school meals, breakfast clubs, and childcare provisions.
In a post on X, Labour MP Jon Trickett, who voted against the government’s welfare changes, wrote: “The suggestion that a Labour government will leave children in poverty because they couldn’t take welfare benefits from the disabled is truly shocking.”
Conservative shadow chancellor Mel Stride, who also appeared on the program, stated that the government had made some “poor choices” and argued that more could be done to reduce the growing benefits bill.
He indicated that his party would seek to amend the government’s welfare reform bill as it progresses through Parliament.
One proposed amendment would reduce entitlement to disability and health-related benefits for individuals with less severe mental health conditions.
IFS analysis indicates that over half of the increase in disability benefit claims among 16-64 year-olds since the Covid-19 pandemic is related to mental health or behavioral conditions.
If no changes are implemented, the health and disability benefits bill is projected to reach £70 billion per year by the end of the decade, a level of spending the government deems “unsustainable.”
The Conservatives have cited a report by the Centre for Social Justice, which argued that reducing mental health benefits for all but the most severe cases would save £7.4 billion per year by 2030.
“We believe, particularly when it comes to mental health, one of the best solutions to those kinds of challenges is work,” Stride said.
“We are the party that believes in work. We don’t believe that welfare should trap people.”
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