{"id":82652,"date":"2025-05-27T08:12:09","date_gmt":"2025-05-27T07:12:09","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=82652"},"modified":"2025-05-27T08:12:09","modified_gmt":"2025-05-27T07:12:09","slug":"why-is-labour-talking-total-economic-nonsense-to-justify-its-desperate-desire-to-keep-children-in-poverty","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2025\/05\/27\/why-is-labour-talking-total-economic-nonsense-to-justify-its-desperate-desire-to-keep-children-in-poverty\/","title":{"rendered":"Why is Labour talking total economic nonsense to justify its desperate desire to keep children in poverty?"},"content":{"rendered":"

Bridget Phillipson MP, who is the Education Secretary, is telling the morning media rounds that if the government were to restore the winter fuel allowance, and remove the two-child benefit cap, then markets would panic, the pound would collapse, interest rates would rise, and we would have a full-blown, Liz Truss style financial meltdown.<\/p>\n

Let's ignore the fact that Liz Truss did not cause a financial meltdown single-handedly, because the Bank of England did that with its announcements on quantitative tightening, and instead just consider this claim.<\/p>\n

Reinstating the Winter Fuel Payment to all pensioners would cost around \u00a31.5 billion<\/a> per year, increasing eligibility by about 10\u00bd<\/span> million pensioners as a result. The estimate allows for the savings of removing a means-tested system.<\/p>\n

The Institute for Fiscal Studies<\/a> estimates that abolishing the two-child limit would cost the government about \u00a33.4 billion annually. This policy change could reduce relative child poverty by approximately 500,000 children (4% of all children).<\/p>\n

Alternatively, the Resolution Foundation<\/a> has suggested that removing both the two-child limit and the benefit cap would cost the government \u00a33 billion.<\/p>\n

These are estimates, but they will do.<\/p>\n

So, the total commitment would be around \u00a38 billion at most.<\/p>\n

What it was suggested Liz Truss did was:<\/p>\n