Report

No half measures

This report from UK think tank the Resolution Foundation explores setting child poverty on a downward course at the Autumn Budget.

The Government’s long-awaited Child Poverty Strategy is due next month, close to, or contemporaneous with, the Autumn Budget. There have been some welcome announcements already: the over-indexation of the Universal Credit (UC) standard allowance for the next four years, for example, and the extension of free school meals to all children in families on UC in England. But despite these actions, child poverty rates are still forecast to soar, from 31 per cent (4.5 million children) in 2024-25, to 34 per cent (4.8 million) by the end of 2029-30.

Using the latest economic data, our modelling shows that if the Government wants child poverty to fall it has no choice but to place income support at the heart of an “ambitious” Child Poverty Strategy. There is simply no form of partial repeal of the two-child limit that would result in child poverty rates being lower in 2029-30 than they were in 2024-25. But in one fell swoop, the Government could reduce the number of children growing up in poverty by 330,000 today and save a further 150,000 children from that fate by 2029-30, if it were bold enough to scrap the two-child limit in full.

Repealing the two-child limit at the Budget would be an unequivocal step in the right direction by the Government. However, even then, their ‘child poverty headroom’ – the gap between our projection for 2029-30 and the 2024-25 baseline – would still be slight (0.4 percentage points), leaving the Government at risk of not achieving any reduction in child poverty over the Parliament if economic conditions were to change.