The Two Child Tax Limit Perpetuates the Myth of Poverty as a Moral Failing
Families who have a third child born after 6 April 2017 will not receive child tax credits for the third child (this has been known as a ‘two-child limit’). The High Court in SC et al v Secretary of State for Work and Pensions in April 2018 held that the two-child limit was compatible with the UK’s Human Rights Act (HRA) with a small exception on kinship rules that were held to run afoul of the HRA. The decision is being appealed and the hearing is scheduled for tomorrow on the 19th and 20th of December 2018. This is a clear retrogressive measure as over half a million families will, on average be £2,500 worse off.
In the SC case, the court mapped the legislative background of the welfare reforms. This reveals the stereotypes that motivate the reforms to the child tax credit. Disappointingly, the court is inattentive to the negative cultural attitudes perpetuated by these changes. For instance, the Treasury and Department of Work and Pensions stated that the objective of the child tax credit policy was to encourage parents ‘to think carefully about whether they can afford to support additional children’. This characterizes people in poverty as promiscuous, irresponsible and not able to reflect on their readiness to be parents without negative financial incentives. Rather than challenge these stereotypes the court accepts that government’s rationale. In a similar vein, the government’s impact assessment held that the two child limit ‘will increase financial resilience’. This portrays people in poverty as incapable of making “good” economic and financial choices. Poverty is therefore framed as a personal moral failing. The government and the court ignore the structural factors—such as low and stagnating wages, lack of legal protection for informal employment and the high costs of childcare, education, housing and transportation—that trap people in poverty.
The court held that ‘the scope of welfare benefits…belongs in the political sphere’. Drawing on traditional separation of powers arguments, the court is highly deferential to the government. The court accepts that the government’s purpose of the two-child limit is threefold:
- reduce the State’s budgetary deficit;
- equality in decisions on family size between recipient and non-recipient of benefits; and
- encourage recipient benefits to work.
First, the court did not require the government to present any evidence that the two child limit will meaningfully reduce the deficit or encourage employment. Alternative measures that reduce the deficit and uphold human rights were not explored.
Second, the court does not question whether this surface-level formal equality (all parents have to make the same choices on their ability to financially support a third child) perpetuates deeper, structural inequalities. There is no appreciation that the effect of the child tax credit limit is that having a family of three or more children becomes a privilege of the wealthy.
Third, in fact, employment is not a guaranteed safeguard against poverty.
Disappointingly the court the does court balance these three objectives against the negative impact on human rights. There are, in fact, a range of negative consequences of these reforms. It has been widely argued that the two-child limit would directly cause people to limit the size of their family, undermine their rights to family and private life and perpetuate childhood poverty. The court seems dismissive of the arguments that the two-child limit will plunge children and families below subsistence levels, referring to them as overstated descriptions.
The ‘two child limit’ is one example in a larger trend of a decade long policy of austerity. It engrains stereotype, and violates the right to equality. It is hoped that the Court of Appeal will challenge these stereotypes and apply a searching proportionality analysis to ensure that all people in the UK, regardless of their socio-economic status, are treated equally.