Rightwing thinktank joins calls to scrap two-child benefit limit

A leading rightwing thinktank has called for an end to the two-child limit on benefits in a move that will put further pressure on the Labour government to rethink its stance.

Onward, which describes itself as a thinktank for “mainstream Conservatism”, said both the wider two-child limit and the higher earner threshold applying specifically to child benefit should be abandoned in order to support parents.

The move follows Nigel Farage’s Reform party and the former Tory leadership candidate Suella Braverman saying the two-child limit should be scrapped, meaning the policy is coming under fire from both right and left.

Onward said the social security system was failing working parents and struggling households with children, with almost 450,000 families affected by the two-child limit.

The two-child cap restricts universal credit and child tax credit to the first two children in most households. The higher earner threshold means child benefit is withdrawn via a taper if a parents earns more than £60,000 and not received at all if they earn more than £80,000.

The thinktank said there was evidence that showed people were not able to have the families they wanted because of the high financial cost of parenthood, and the two-child limit.

It warned the principal effect of the two-child limit – introduced in 2017 to ensure families on benefits faced the same financial choices about having more children as those not receiving taxpayer support – had been to increase child poverty.

Onward said the rule had contributed to 30-year high levels of relative child poverty, with the cap effectively cutting the income of families affected by £3,000 per child compared with the previous system.

The thinktank made the suggestion as part of its campaign for a New Deal for Parents, backed by the parenting forum Mumsnet. Alongside the recommendation on scrapping the two-child limit, Onward is calling on the government to double the amount of time women receive the higher rate of statutory maternity pay, triple paid paternity leave, and ensure employers include parental leave and pay policies in job advertisements.

Related: Two-child benefit cap is cementing regional poverty, Starmer told

Justine Roberts, the Mumsnet founder and chief executive, said: “Whether or not to have children is a deeply personal decision, but it’s one that’s often influenced by financial factors. We know from the millions of conversations on Mumsnet that high childcare costs, the housing crisis, and the effect of the ‘motherhood penalty’ on women’s careers all pose barriers to parenthood in the UK.

“This report is an important contribution to the conversation about how we tackle the financial barriers to parenthood, and reflects much of what we hear from our nine million users, particularly around low rates of statutory maternity and paternity pay, the effect of the high income benefit charge, and the importance of tackling the ‘motherhood penalty’ in the workplace.”

Phoebe Arslanagić-Little, the author of the work at Onward, said: “If the new government is serious about supporting families, it should end the two-child limit and the high-income child benefit charge.

“These policies make parents poorer and send the signal that the government doesn’t value the vital contributions parents make in having and raising children, and a time when we should be making it easier for parents to have and support families.

“We are failing to support parents and the result is rising child poverty and an increasing number of people locked out of family life.”

The measure came into force in 2017 under Theresa May’s government after being announced by the former chancellor George Osborne in 2015 as part of an austerity drive on welfare benefits.

Since then, it has been roundly condemned by charities for contributing to high levels of child poverty.

Labour has so far declined to reverse the policy, despite pressure from many on its backbenches. A vote on the issue led to a minor rebellion of seven Labour MPs, and caused Keir Starmer to suspend the whip from them.

Starmer was last week warned that the two-child benefit cap had contributed to a widening gulf in regional poverty, leaving almost half of all children in some towns and cities living below the breadline.

With the prime minister under pressure to drop the policy, research from the Resolution Foundation showed a “very strong relationship” between local levels of child poverty and the share of families affected by the measure.

The Resolution Foundation thinktank said failure to tackle entrenched regional inequalities over the past three decades had been compounded by the policy, leaving almost half of all children living in Birmingham, Tower Hamlets in London, Manchester, Sandwell, Stoke-on-Trent, Oldham, Wolverhampton and Walsall to grow up in families in poverty.

A government spokesperson said: “No child should be in poverty – that’s why our new cross-government taskforce will develop an ambitious strategy to tackle the crisis.

“Alongside this urgent work, we will roll out free breakfast clubs in all primary schools while we grow the economy and make work pay for hardworking families in every part of the country.”