Fixing the narrative around welfare
The removal of the two-child benefit cap is a long-overdue step forward in tackling child poverty. With 450,000 children expected to be lifted out of hardship, this represents the biggest single reduction announced in any Budget this century.
The Liberal Democrats have campaigned relentlessly for its removal since the policy was introduced in 2017, and I have continued to press for it through my role on the Work and Pensions Select Committee. It is a moment worth celebrating, and is a world away from last year, when the Labour Party suspended seven of its own MPs for voting to scrap the cap.
With the mystique around the Budget now fading, we must now ask what this means for the broader national debate around welfare. This change arrives in a political climate still shaped by damaging myths about the benefit system and who it supports.
Within hours of the Budget, we heard the same old, tired narrative that “hard workers are being forced to fund benefit scroungers”. This view is not only damaging, it’s simply not true. The reality is that lifting the two-child cap will benefit people in work, not alleged ‘benefit scroungers’, and the evidence suggests it has no significant effect on decisions to have a family one way or the other.
As of April this year, nearly 60% of those subject to the two-child limit are actually working households. These views undermine support for a functioning welfare state, and they harm the people who rely on it through no fault of their own.
Worryingly, the Labour government have done little to fend off this idea. Earlier in the year, they caused absolute chaos when they attempted to cut access to Personal Independence Payments (PIP) and Universal Credit, pushing forward the narrative that welfare spending is too high and must be reduced by simply cutting access.
That approach risks repeating the mistakes that have harmed so many vulnerable people, including Philippa Day and Kristie Hunt, whose lives were devastated by a system built on suspicion rather than support. It’s disappointing to see a Labour government getting caught up in the kind of false narrative which normally thrives on the right.
Total welfare spending for 2025 to 2026 is 10.8% of GDP, only 0.8% higher than before the 2007 financial crisis. Not only this, but fraud amongst PIP claimants currently stands at 0%, down from 0.2% in 2022-23.
Since the post-crisis peak in 2012 to 2013, welfare spending as a share of GDP has actually fallen by 1.2%. This is not a system spiralling out of control. It is a system that has remained broadly stable for over a decade.
The rise in disability and long-term health claims is not a failure of welfare administration. It is a symptom of a much larger health and social care crisis, shaped by years of underinvestment in preventative care. Every pound cut from welfare support eventually finds its way elsewhere into other public services.
We need a system built on evidence, genuine reform and above all, honesty. Welfare spending is not out of control. Most benefits are not going to people who don’t need them. The real problems stem from a broken Department for Work and Pensions and a health and social care system that hasn’t been modernised for the challenges the country faces today.
The Budget took an important step forward and has bought Rachel Reeves some time. But with the outcomes of the Timms Review being released next year, we must continue to confront the myths within our welfare debate.
Otherwise, we risk repeating the punitive thinking that created the two-child cap in the first place. Fixing this system is not only morally right, but it is also fundamental to our shared economic future.
John Milne is the Liberal Democrat MP for Horsham.
