Oldham Labour refuse to call on government to scrap the two-child benefit cap

A motion put forward by Oldham Liberal Democrats calling on the new Labour government to scrap the two-child cap on universal credit was voted down by Labour councillors at Full Council meeting (11/09.)  The cap, which prevents families from claiming Child Tax Credit or Universal Credit for more than two children in a household, was introduced by the Conservatives in 2017 and has been widely criticised by children’s charities and anti-poverty campaigners.

Liberal Democrat Group Leader councillor Howard Sykes MBE said, “It’s deeply disappointing that instead of speaking out for the more than 11,000 children in Oldham who are living in poverty, Labour instead chose to change the motion so that it protects their MPs in government.” 

A Labour amendment which changed the motion so that instead of calling on the government to act now, the Labour-run council wants the government to act ‘when finance allow.’  The Liberal Democrats called Labour’s response a “cop out” and a “missed opportunity to stand up for Oldham Borough.”

Councillor Sykes said, “It is estimated that child poverty costs the UK economy £39 billion each year, whereas scrapping the two-child cap will cost £1.3 billion.  This is a no-brainer.  So, while Labour argue that we cannot afford to take this step, we’re arguing that we cannot afford not to.  Labour’s position is a cop out and a missed opportunity to stand up for people in Oldham.” 

Saddleworth West and Lees representative and Liberal Democrat Deputy Leader councillor Sam Al-Hamdani said, “It was Labour Party policy to scrap the cap until late last year.  In government, so far there has been little difference between Labour and the Conservatives and the reason for that is those Labour politicians that do speak out against the government on child poverty are kicked out.  They are scared of their leaders.”

“So far, every major decision this government has made, whether it’s on child benefits or winter fuel payments for pensioners, is going to hit ordinary people in Oldham Borough hard.  Oldham Labour are just watching from the sidelines and people deserve more.”

Liberal Democrat Motion in full:

Full council 11 Sept 2024 – Notice of Opposition Motion

Scrap the two-child benefit cap

Proposed by: Councillor Howard Sykes
Seconded by: Councillor Sam Al-Hamdani

The Two Child limit to benefit payments was introduced by the Conservative Government in 2017 and is supported by the current Labour Government.  It prevents families from claiming Child Tax Credit or Universal Credit for more than two children in the household.

Council notes the recent research conducted by the End Child Poverty Coalition which has found that:

• 1.5 million children in the UK live in households subject to the two-child limit on benefit payments. That is roughly one-in-ten children in the UK.
• In 2023/24 the two-child limit cost families up to £3,235 per child each year.
• There is a strong correlation between families affected by the two-child limit and those who are living in poverty.
• Scrapping the two-child limit would lift 250,000 children out of poverty overnight, and significantly reduce the level of poverty that a further 850,000 children live in.
• Scrapping the two-child limit would cost £1.3 billion, however it is estimated that child poverty costs the economy £39 billion each year.

In Oldham 11,340 children in 3,160 households are currently affected by the two-child limit to benefit payments.  That is 18% of all children in the authority area.  At the same time 27,760 local children are living in poverty.

Council strongly believes that the two-child limit to benefit payments is a cruel and harmful policy that should be scrapped.  Research from the University of York has shown its introduction has had no positive impacts on employment and earnings. Instead, it has dragged thousands of local families into poverty.

Council notes the Liberal Democrats have consistently opposed the two-child limit to benefit payments since it was introduced – calling for it to be axed in their 2017, 2019 and 2024 manifestos.  Council notes with concern the stance of the Labour Government who are committed to keeping the cap – going as far as suspending the whip from MPs who rebel against this position.

Council resolves to:

1. Instruct the Chief Executive to write to the Chancellor of the Exchequer and the Prime Minister outlining Oldham Council’s strong belief that the two-child limit to benefit payments should be scrapped – which would help more than 11,000 children across Oldham.
2. Further instruct the Chief Executive to write to all of Oldham’s MPs, asking them to commit their public support to the campaign to end the cruel two child limit to benefit payments.
3. Ensure the number of children a family has is considered when a hardship grant is given out by the council.
4. Explore ways to support families impacted by the two-child limit across Oldham Borough, including through free school meals.