Recent weeks have seen much discussion on child poverty and the need to remove the two-child benefit cap. IF researcher, Toby Whelton, examines how the abysmal housing conditions of millions of children serves only to exacerbate this current crisis.
The two-child benefit limit
Discussions about child poverty have dominated politics this last week with seven Labour MPs rebelling against the whips in order to vote for the removal of the two-child benefit cap.
The current “two-child limit” means low-income families do not receive additional child benefits beyond their second child. This policy has significantly contributed to the fact that 30% of children now live in poverty while nearly half of all children living in families with three or more children are impoverished.
There are 450,000 households affected by this policy and it is estimated that removing the cap would lift 500,000 children out of poverty. Removal of the limit would be the intergenerationally fair thing to do.
Children in “non-decent” housing
What went under the radar during this outcry were the statistics published by the ONS that revealed the current levels of children in inadequate housing. In 2022−23, approximately 1.5 million children lived in homes that failed to meet the decent homes standards. A home is considered “non-decent” if it fails to meet either the minimum health and safety standards; is in a state of disrepair; lacks modern facilities; or has ineffective heating and insulation.
The data also revealed 1 million children currently live in homes that have a Category 1 hazard, which is defined as a serious and immediate risk to an individual’s health and safety. A further 790,000 children live in homes with either damp or mould, with children more likely to live in damp than any other age group. This is not even to mention the 150,000 children who are homeless and put up in temporary accommodation, which has increased by 15% in the last year. The conditions many children are facing are abhorrent.
Generation rent
As with so many instances of intergenerational unfairness, seemingly unrelated injustices are in fact intertwined. The homes that are most likely to be “non-decent” are those that are privately rented. Of all rented homes, 21% are below the minimum standard, which is twice as many as any other tenure, with 8% and 10% of owner-occupied and social housing considered “non-decent” respectively. Of course, those most likely to privately rent are the youngest generations, with 32% of privately rented households made up of 25−34 year-olds.
While there have been improvements in standards across all tenures, the private rental sector has a far greater proportion of “non-decent” homes compared to other tenures and has improved at a slower rate. Too many landlords are failing to meet the bare minimum standards of housing and this is to the young’s detriment. Not only are the young facing extortionate rents and economic insecurity, but also threats to their health and safety.
These figures reveal not just a story of child destitution but underlying systemic intergenerational unfairness.
Solutions
Bringing attention to the dire housing situation of many children is not to distract from the damages of the two-child benefit cap. There is near consensus that lifting the two-child limit is the most effective singular policy to reduce child poverty. The new government has delayed action on the basis that it is a fiscal question that can only be addressed in the first budget, given the costs of lifting the cap are estimated to reach £3.4 billion a year. However, when the decision does come, an excuse of little fiscal headroom will not be adequate. There are a multitude of ways of raising money
that would also improve intergenerational fairness.
Equalising capital gains with income tax would mean immensely asset-rich older generations would begin to contribute their fair share of tax and alleviate the overburdened earned income of younger generations. A wealth tax or extending national insurance contributions to over-65s would have a similar effect and raise ample funds. In recent decades, there has been a widening gulf in government spending on generations as the welfare state has withdrawn from the young and burgeoned for the old. Removing the child benefit cap and taxing older generations and wealth more equitably would begin to redress this imbalance.
In terms of housing, the proposed Awaab’s Law in the King’s Speech, which will hold landlords accountable to damp and mould, is a good start, yet more drastic measures will be needed. The data shows social housing has the lowest rate of substandard housing, suggesting a need to replenish the UK’s depleted stock. In IF’s latest report Locked Out, it was argued the government should aim to build at least 90,000 council houses a year, to protect the young from the current highs of overcrowding, soaring rent and high levels of homelessness. It is evident that the most vulnerable must be
sheltered from the worst excesses of the private rental market.