Thousands of struggling families in Leicestershire hit by two-child benefit cap

Thousands of families in Leicestershire are impacted by the two-child benefit cap, figures reveal. The cap, which restricts parents from claiming Child Tax Credit or Universal Credit for more than two children, was introduced by the Government in 2017 to help cut social care costs.

However, it has proved controversial since it came into force, and the new Labour Government is facing increasing calls to scrap the cap. The Bishop of Leicester is among those who have spoken out, saying the policy is “unfair”.

He added that getting rid of the policy was “essential if we are to turn the tide on poverty and ensure every child has the support to flourish in all areas of life”. Newly elected Prime Minister Sir Keir Starmer said last month his government would scrap the policy “in an ideal world”, but added: “We don’t have the resources to do that at the moment.”

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New figures show that more than one and a half million children across the UK are affected, with an independent think tank predicting that most children in large families will fall below the poverty line by the end of this Parliament, five years from now, unless the policy is abolished. In Leicester, more than one in three children live in poverty.

Across the city and county as a whole, there were 12,640 families who claimed Universal Credit or Child Tax Credit in the year to early April, the Reach Data Unit said. Almost two-thirds of them, 7,610 (60 per cent), have more than two children.

More than half of the local families affected by the roof – 4,300 – lived in Leicester. Charnwood district had the second highest number, 870, followed by 530 in the North West Leicestershire district.

This was closely followed by 510 in Hinckley and Bosworth borough, and 500 in Blaby borough. There were 340 families impacted in Harborough borough and 280 each in Melton borough and Oadby and Wigston borough.

Leicester West MP Liz Kendall has been appointed as the government’s new work and pensions secretary following the general election. She has also weighed in on the issue of child poverty in the country. She called it “a stain on our society” and promised to hold “critical meetings” with charities and experts about her strategy to tackle it.

Figures published this week by the Department for Work and Pensions showed there were 1.6 million children living in households affected by the policy in April this year, up from 1.5 million in April 2023. Of these, 52% of children were in households with three children, 29% in households with four children and 19% in households with five or more children.

Around 440,000 families in receipt of universal credit or child tax credit were not receiving the element or amount for at least one child because of the policy, up from 409,050 in April 2023. The Resolution Foundation said abolishing the two-child limit would cost the government between £2.5bn and £3.6bn in 2024/25, but that such costs were “small compared to the harm the policy causes”.