NAT-STORY2B-041225-DF - Two child benefit cap - video Dailymotion

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The cap on benefits for more than two children has been scrapped and workers will pay more tax to fund it. We look at the pros and cons, and how it will affect people.

Transcript

00:00The cap limiting child benefits to children came in on the Conservative government as

00:05part of austerity, trying to cut the benefit bill for reasons which they believe was good

00:12and perhaps to encourage people to reduce their spending.

00:17What we're talking about, because these are children, and of course we know that we've

00:21got a problem in terms of what's known as the replacement rate.

00:25We are not having enough children as a society to replace the people here.

00:29And of course, as we look at the future, there is going to be more old age pensioners, which

00:33is going to be a difficulty for the society to afford this because we need people working

00:38to pay taxes, which then gets filtered back into the benefit system.

00:43So that's the context.

00:44And this has been a real bone of contention.

00:46This was an election manifesto promise under Labour.

00:50Keir Starmer got to power with the so-called Loves Majority.

00:54And indeed, there was even discussion until fairly recently as to whether to do this.

00:58And there are some within even the Labour Party who think, well, yeah, it's a problem in

01:03terms of affordability, although in the big scheme of things we're talking about probably

01:06a couple of billion, which I know is not exactly a chicken feed.

01:09But nonetheless, this is money that's going to be given to families who have more than

01:14two children.

01:15And the other contextual factor is that poverty has risen very dramatically since the period

01:22of austerity, which starts in 2010 under the coalition government.

01:26So that's where we're at.

01:28It will happen.

01:29Of course, it could be reversed under sort of a new administration, but that's the future.

01:32We don't know what will happen.

01:34There is, as I have indicated a couple of moments ago, concern with the Labour Party.

01:38Is this the right thing to be doing?

01:40Because, of course, what is actually happening at present is this will sort of require money

01:44from taxpayers.

01:46And of course, we're talking about middle income earners who will have to contribute more in

01:50terms of taxes.

01:51And of course, I know tax rates have gone up, but this is about the sort of the freezing

01:54of the thresholds, which means progressively we're going to pay more and more tax.

01:59What we've got was a budget that was purposely intended to appease backbenchers within the Labour

02:05Party who came to sort of to power, promised their constituents they would do something

02:09about child benefit, particularly for sort of constituents who have larger families and find

02:13it very difficult to make ends meet.

02:15And indeed, if it does nothing but to improve sort of child poverty or sort of brings that

02:19down, then it will be a good thing.

02:21But hey, the arguments will continue as to whether it was the right thing to do in a period

02:25where sort of you're asking sort of workers to contribute more, which, of course, is the

02:28sort of the big issue.

NAT-STORY2B-041225-DF - Two child benefit cap

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