Paula Barker, an ally of Labour leadership candidate Andy Burnham, has urged the next Prime Minister to scrap the benefit cap, a move that could provide families with an additional £832 per year. The cap currently limits the total amount of benefits a working-age household can receive, with couples and single parents outside Greater London facing a maximum of £1,835 per month, while those in the capital are capped at £2,110.25.
Pressure mounts on Burnham to end the cap
Barker, who sits on the interim council of the Mainstream group linked to Burnham, pressed the government in the Commons to review the policy. She argued that the cap forces families to turn to food banks and that its abolition would build on the recent scrapping of the two-child limit. The two-child limit, which ended in April, restricted Universal Credit claims to support only the first two children in most households.
Social security minister Sir Stephen Timms defended the cap, saying it provides a modest incentive for people to start work. He stated: "Being in work is the best way to avoid poverty. The benefit cap does give a modest but significant incentive to start work and then to progress in work. Some people are not able to work, so the cap doesn’t apply to people out of work on disability or caring benefits, but for others it remains in place."
Impact on families and child poverty
According to the Child Poverty Action Group (CPAG), the benefit cap has a significant impact on the 122,000 households currently affected. Nearly three-quarters of these households are single parents, and half have a child under five. The average loss of income is £61 per week, equivalent to £832 per year. CPAG warned: "The benefit cap has only risen once since it was introduced just over 10 years ago, and was actually lowered in 2016. Perversely, the current cap levels – £22,020 outside London and £25,323 inside Greater London – are still lower than when the policy was first introduced in 2013."
The charity emphasised that for most capped families, rent pushes the household into the cap, leaving them with very little income after paying the landlord. CPAG previously stated: "The benefit cap must go. It has had a significant impact on families caught up in it, and it’s so important that the government scraps the policy."
Political reactions and future prospects
Conservative shadow work and pensions secretary Helen Whately criticised the call for more spending, saying: "British people are sick and tired of footing the bill for Benefit Street and seeing welfare claimants living lives of luxury at their expense." She urged the government to toughen the cap, claiming it could save £1 billion.
Sir Stephen responded: "If there is a plan, I’d be very interested to see it. We certainly haven’t seen any details of it. Her comments are a further example of her expressing dissatisfaction with the system left behind by her government for 14 years. We’re reforming the system, making sure it’s doing the job we need it to do, and we’ll carry on with that programme of reform."
The benefit cap applies to workless households where no one earns the equivalent of at least 16 hours a week at the minimum wage. Households with disability benefit claimants are exempt, but families with caring responsibilities for young children are not. As Burnham campaigns to replace Sir Keir Starmer as Prime Minister, the debate over the cap highlights the differing visions for welfare reform within the Labour Party and across the political spectrum.
