You wouldn’t usually get several updates from me in one week, but this one deserves a mention for those committed to understanding and tackling inequality in the UK
The Forth Bridge, kilts and Harry Potter…. amongst many other wonderful innovations!
The latest news from Scotland shows that pioneering isn’t limited to the past.
Scottish Finance Secretary, Shona Robison, has confirmed the Scottish government's intent to scrap the controversial two-child benefit cap. She has set a target to provide funding to the affected families by 2026, aiming to lift thousands of children out of hardship and poverty.
Robison's decision to abolish the cap, which currently affects an estimated 15,000 children in Scotland, is a big deal.
Why the two-child benefit cap is a big deal
The two-child benefits cap has made headlines several times this year after MPs voted to maintain the policy earlier this year. The cap, introduced by the Conservative government in 2017, prevents lower-income families from receiving universal credit or child tax credit for more than two children.
Barnardo's chief executive Lynn Perry has previously called the limit "one of the biggest policy drivers of child poverty" amidst calls for it to be abolished.
When Labour took power in the summer, many believed they would reverse this policy, given their strong opposition to it in the past. I’ve also previously argued it was somewhat of an ‘open goal’ for the government that would have an immediate and direct impact on the lived reality of thousands of families.
You can find out more about the two-child benefit cap here
This paper by Andersen et al (2024) is also a useful read in showing the harms that policies are doing to children through drawing upon data collected from interviews with parents affected by the benefit cap and the two-child limit.
Other important Scotland budget bits
Robison also announced changes to Scotland's income tax system. The Scottish government will increase the thresholds for the basic and intermediate tax bands by 3.5%, ensuring that more of people's earnings will be taxed at lower rates.
(Source: BBC, 2024)
This move is expected to benefit many who will pay less tax than they would in other parts of the UK. Again, this will be of interest to those tracking how policy and governmental decisions can promptly and directly impact hardship and the lived-reality of millions of families.
The draft budget also includes funding increases…
an additional and must needed £2 billion for the NHS
a new winter fuel payment for pensioners
£4.9 billion to tackle climate and sustainability issues
Education investment will rise by 3%
£34 million investment for cultural innovations
However, important to note that councils will not see a freeze on council tax rates, as there will be no cap on council tax rises for the coming year (this will still be an issue for many families/households)
The abolition of the two-child cap, while a bold move, will require collaboration with the UK government to access necessary data and implement the policy. It will be interesting to see how this is navigated.
The move to scrap the policy, expected to cost up to £150 million, is part of a larger effort to mitigate the impact of UK-wide welfare policies. The Scottish government here is clearly pushing for a more family-friendly social security system and a more prompt alleviation of hardship for households that need it.
It’s not a silver bullet. But, it is a start and shows progress.
A few responses…
The budget will be debated in the coming weeks, and the SNP government hopes to gain enough support from opposition members to pass it.
The End Child Poverty coalition have been quick to applaud the news in Scotland and are calling on the UK Government to action it at scale.
John Dickie, Director of Child Poverty Action Group (CPAG) in Scotland, says…
“The Finance Secretary is absolutely right to mitigate the two-child limit in the absence of abolition at UK level. It’s a pernicious policy that pushes 15,000 children into poverty in Scotland alone. Investing in social security for families is key to delivering on the First Minister's number one priority of eradicating child poverty. The devil will be in the detail and families really can't wait until 2026 to see their incomes boosted, so an above inflation increase to the Scottish child payment is still needed in the meantime. But there is no question this is the right focus for prioritising spend. We need the UK government take the same approach to investing in family benefits as a matter of utmost urgency”
(Source: CPAG, 2024)
Joseph Rowntree Foundation have also provided a useful insight.
Associate Director for Scotland Chris Birt says,
“While this budget won't eradicate child poverty, the First Minister’s stated driving purpose, it does show positive signs of investing in the right things.
Committing to the eliminating of the two child limit by investing in social security is a positive recognition that political choices can reduce poverty. Reversing the huge cuts to affordable house building is also welcome while we're in the jaws of a housing emergency. The Parliament as a whole, however, face the challenge of how the child poverty reduction targets will be met. The budget as drafted should nudge things in the right direction but there remains much work to do.
The clock ticking on those targets is getting louder and louder.Families continue to struggle to make ends meet – it’s time for the whole Scottish Parliament to seize the challenge of delivering a Scotland where child poverty is a thing of the past".
(Source: JRF, 2024)
Find out more about the work of Child Poverty Action Group and calls on the UK Government to abolish the two-child benefit cap here.
The JRF have also produced this report outlining how policy impacts poverty in the UK; alongside what can be done about it.
Further Links
Other helpful links if you’re wanting to understand more about policy and it’s impact on poverty/inequality in the UK.
Poverty in the UK: Summary of poverty stats/research from various sources via me.
UK Poverty 2024: The essential guide to understanding poverty in the UK | Joseph Rowntree Foundation
State of the Nations: lessons in tackling child poverty from across the four nations | CPAG
Two-child Benefit Cap and Child Poverty - Hansard - UK Parliament