July 18, 2023 - 10:00am

The present cap on benefits after two children is a popular policy. Even among Labour voters more people support such measures than oppose them. Meanwhile, among the wider public, 60% think the present settlement should be retained.

This perhaps explains the reticence of Sir Keir Starmer to change the status quo, something he made clear while speaking to the BBC’s Laura Kuenssberg on Sunday. Yet when Starmer sought his party’s leadership in 2020, he pledged to end the cap. Later that same year, Deputy Leader Angela Rayner labelled it “obscene and inhumane”, while as recently as last month Jonathan Ashworth, the Shadow Work and Pensions Secretary, described the policy as “heinous”. Other earlier critics from the shadow cabinet include Wes Streeting, Ian Murray and Jonathan Reynolds, none of whom has now complained about their party’s latest position — nor offered their resignation. 

While the polling explains Starmer’s ambivalence, the costs of scrapping the cap are comparatively small. A quarter of a million children would be removed from relative poverty at a cost of £1.3 billion. For context, Britain gave Ukraine £2.3 billion in weapons last year.

Yet rather than encouraging families, Britain often feels like a society geared towards stopping them, and the data confirms just how hard things are for would-be parents. According to the OECD, the UK has the most expensive childcare of any developed country, with families spending almost a third of their wages on it. 

Then there’s the extortionate cost of housing, which has risen twice as fast as wages since 1997. Consequently, those in their late 30s and early 40s are now three times more likely to rent than two decades ago; the lucky few who do get on the property ladder are set to experience a sustained period of high interest rates. 

They should count themselves lucky, though. The prospect of a no-fault eviction, which the Government intends to scrap this year, leaves renting parents in a permanent state of anxiety. Receiving two months’ notice to move with several children is bad enough: imagine having to then re-register with GPs, dentists and, in some cases, schools. 

Given the various disincentives to have children — from childcare to housing and the cost of food — why shouldn’t the Government step up where it can? That is presumably what powered Jeremy Hunt’s surprise announcement in March of a major expansion to free childcare. Similarly, Labour says it wants to build a country where “families come first” and where “Britain is the best place in the world to grow up”. Quite how that fits with discriminating against larger families in the benefits system is unclear. 

A common response is that more generous benefits only encourage “scroungers”. This is despite the fact that labour participation rates are high and most people claiming benefits are in a household that works. Some of those shouting loudest today — and in the process stigmatising larger families — will no doubt be the ones arguing to subsidise kids a decade from now. For the political Right this is an especially pressing issue. After all, a Britain with significantly lower migration would very soon start to shrink.

Should we care? Would a falling population really be so bad? Alongside Britain’s already low birth rate of 1.7 children, we have an ageing population. The number of over-65s will increase by 40% between 2016 and 2036, while those over 80 will double. Already, the country’s leading cause of death is dementia. The economic and social costs of all this will be huge.

As the population grows older and the nation requires a massive expansion in elderly care, the labour force will comparatively shrink — with the ratio of working age people to each pensioner falling from four to three. The result? Permanently lower growth, higher inflation and higher borrowing. Meanwhile, the taxpayer will struggle to meet the obligations of pensions as well as elderly care. 

If Britons want a greying nation to function in old age, they will have to accept at least some immigration. Even more than that, they’ll need to embrace greater state support for families. Discriminating against larger ones in the benefits system should be the first thing to go. Someone should tell Keir Starmer.

Aaron Bastani is the co-founder of Novara Media, and the author of Fully Automated Luxury Communism.