Two-child benefit cap is ‘key driver of child poverty’ in UK, research suggests

Local child poverty rates across the UK correlate very strongly with the percentage of families affected by the two-child benefit cap, research has found, indicating that the controversial policy is a key factor behind children growing up in deprivation.

The study, carried out by Loughborough University for the End Child Poverty Coalition, will heap pressure on Labour over the party’s refusal to abolish the cap, which limits universal credit and child tax credit to a family’s first two children, if they come into power.

The limit can cost families more than £3,000 a year for each additional child, with earlier research showing scrapping the policy would take 300,000 children out of poverty around the country.

Related: What is the UK’s two-child benefit cap and how has it affected families?

The new study was based on existing government statistics for children living in low-income families – defined as those with incomes below 60% of the local median income – but adjusted these for housing costs to avoid underestimating poverty rates in places such as London.

It found that in two-thirds of UK parliamentary constituencies, at least a quarter of children were growing up in poverty, with the figure rising to 90% of constituencies in north-east and north-west England and Wales.

The coalition, which groups together more than 80 charities, faith groups and unions, said local statistics were useful given the extremely high variation in poverty levels in some places.

For example, the study found that Bethnal Green and Stepney in east London had a child poverty rate 19 percentage points higher than the regional average, while in Richmond Park, in the west of the capital, it was 21 percentage points lower.

The research compared local child poverty levels with statistics for the proportion of families affected by the two-child cap, finding a very strong correlation between the two, and “providing further evidence that the policy is a key driver of child poverty”.

The study cited earlier research indicating that removing the cap, at a cost of £1.8bn annually, would take 300,000 children out of poverty and reduce its impact on a further 800,000 children.

While Keir Starmer and a number of his frontbench have previously condemned the cap, the Labour leader has said the party does not plan to remove it, citing fiscal pressures, with Starmer saying: “We have to take the tough decisions.” The leadership is under pressure from a number of backbenchers to change course.

After the release of the new research, Kim Johnson, who is standing again to be the Labour MP for Liverpool, Riverside, said the statistics “remind us what this election should really be about”.

She said: “More and more children in this country are growing up in destitution, even though many of their parents are in work. Schools are running food banks, and public sector workers including nurses and teaching staff are using them. We are the sixth richest economy in the world, this is immoral and shouldn’t be happening. It should outrage us all.”

She said Labour needed “to lay out our plans to tackle child and in-work poverty. Our new deal for workers is a great start, but we need to go much further and extend free school meals and lift the two-child cap on benefits, policies now supported across Labour’s political spectrum including by Gordon Brown and Torsten Bell. I can think of no greater priority.”

Labour was contacted for comment.