A tale of two nations and two families

Thea and Kirsty both have three children, but benefit policies in England and Scotland mean their lives are very different. Following a row in the House of Commons over the abolition of the child benefit cap, we meet the families affected.

In a one-bedroom apartment in North London, Thea Jaffe tries to quiet her 10-month-old son Isaac.

Isaac is the main reason we are here. He is Thea’s third child and because she relies on benefits to supplement her salary, she does not get Universal Credit or Child Tax Credits for him because of the two-child policy.

The policy, introduced by the Conservatives, means that any third or subsequent child born into a family after April 2017 will not be fully supported by the benefits system, receiving only child benefit of £16.95 a week.

Thea, a 38-year-old account development manager for a logistics company, knew she would be strapped for cash when she unexpectedly became pregnant. She knew about the policy and considered alternatives. But in the end, she decided to go with Isaac.

“I couldn’t make this decision based on government policy, because that can change in the blink of an eye,” she says. “It only takes one election and the environment is completely different. Do you really want to make decisions about your family based on something that is so volatile?”

Over the next hour or so, her other two children wander in and out. Nine-year-old Moses finished school earlier this week and needs to burn off some energy; JJ, who is two, wanders sleepily into the living room after a nap.

Their rent has gone up by £800 a month over the past two years, Thea says, because they’ve had to move. The two-child policy means larger families lose out on around £3,500 a year per child, and Thea’s £43,000 salary isn’t nearly enough to ease money worries.

A policy change, as many MPs want, would mean that “we could buy milk on the way home instead of going out of our way to find the cheapest milk. We could relax a bit more in our meal planning. And that in turn would give me more space to really help them with their homework and be there for them emotionally and just parent them the way I want to.”

The situation in which Thea Jaffe finds herself goes to the heart of the problem facing the new government in this area.

The stated aim of the policy was “to ensure that families receiving benefits had the same financial choices about having children as families who supported themselves solely through work”, according to then Chancellor of the Exchequer George Osborne. The policy, ministers said at the time, would also encourage them to work more.

The policy appears popular – a YouGov poll from last year indicated that 60% of the public was in favor of conservation.

However, research suggests it has failed to achieve its goals. A 2022 paper suggested the policy reduced the chance that an affected family would have a third or subsequent child by only 5%A report by the House of Commons Work and Pensions Committee concluded that there was no evidence that it has increased employment among larger families.

Official government data shows that child poverty has increased among larger families, from 41% in 2016/17 to 46% in the most recent figures.

The two-child policy affects 440,000 households, with 1.6 million children. It affects families across the UK, but the impact of the policy has been somewhat reduced in Scotland due to the Scottish Child Payment.

The Scottish Government introduced it in 2021, but it has since been expanded and the value of the payment has increased: it is now worth £26.70 a week and is paid for every child under 16 living in a low-income household. It is currently received by 330,000 children. “It takes some of the pressure off you month to month,” says Kirsty Murray, a mother of three from Cumbernauld.

The 43-year-old works for a charity, while her husband, Dougie, is a personal support worker for people with disabilities. Two of their three children – David, 16, and Rebekah, 12 – have additional needs, so the family’s total income of £25,000 is often stretched.

Next term they will also have to start paying for school meals for their youngest daughter, Mia, who is 10. Scottish Child Benefit pays the family £213.60 every four weeks for their two daughters; David’s payments stopped when he turned 16.

“Life is stressful when you have two children with additional needs,” says Kirsty. “It means we can do things like go out for dinner, go to the cinema, do whatever the children want to do.”

She is fully aware that she is luckier than similar parents in England. “Is that fair? No. If governments came together and said, ‘OK, what works in Scotland?’ then why couldn’t something similar be done in England?”

The Scottish Child Payment has broad cross-party political support. It cost £430 million in the last financial year, paid for by higher tax rates in Scotland. Early evidence suggests that it the need for some families to use food banks has decreased slightly.

The Scottish government expects 60,000 children to be lifted out of poverty this year, but the number of children in Scotland has not fallen since the policy was introduced.

“We know that inflation was very high for a number of years and that costs were rising and households were under a lot of pressure on their incomes,” says Hannah Randolph, an economist at the Fraser of Allander Institute at Strathclyde University. “So it’s possible that child poverty rates would have been higher without the Scottish Child Payment.”

The Children’s Ombudsman for Wales has called on the Welsh government to copy Scottish child benefit but the new Labour government has yet to make a similar suggestion.

It stresses that it cannot currently afford to scrap the two-child limit, which would cost more than £3bn. The Prime Minister says tackling child poverty requires a holistic strategy that does not focus on just one policy.

There is no silver bullet to tackle the problem, Sir Keir Starmer told the House of Commons earlier this week. “It’s a complex set of factors – to do with jobs, to do with housing, to do with education, to do with health. That’s why you need a strategy to deal with it.”

The last Labour government did reduce child poverty. A 2012 government report showed that the number of children living in relative poverty has decreased by 1.1 million between 1998/99 and 2010/11, from 26% of children to 18%.

The think tank Institute for Fiscal Studies found that a key element in that change was an annual increase in spending of £18 billion about benefits for families with children.

Ultimately, welfare reform is the key to addressing the problem, according to Ruth Patrick, a professor of social policy at York University.

“We need to look at housing, employment, childcare, early years and education. But the fundamental answer, driven by the evidence, is that we cannot tackle child poverty without investing in our social security system. It is as simple as that.”