Group of 40 economists & academics tell Chancellor ending two-child benefit cap will help grow economy

The signatories, organised by Save the Children and 'No Limits to Childhood', warn that together the policies have become “the largest driver of rising child poverty in the UK" and must be overturned in full.

The group write that the two child limit and benefit cap are "economically inefficient" because it "undermines public health, early years development and educational outcomes.... This in turn increases pressure on local services, including schools, health and housing."

The letter, seen by LBC, says: "The long-term cost to the economy from lost productivity, reduced tax revenues and higher public spending outweighs the short-term savings from these policies."

They say that the two child limit generates around £3.6billion a year, but the cost of child poverty costs far more - £39billion a year.

The Treasury is said to be considering a number of options of how to lift it ahead of the major fiscal event at the end of November, but it will depend on the state of the public finances and how much there is to spend.

The cap - which limits the amount of benefits that a family can receive to the first two children - was brought in under David Cameron's Conservatives, but Labour MPs have long been pushing to scrap it.

Sir Keir Starmer ordered a child poverty strategy to look into how it can be done, and Education Secretary Bridget Phillipson, who heads up the group, has indicated it will go.

LBC reported last month that Downing Street was looking at putting a mention to lifting the cap into the PM's Labour party conference speech, but had yet to make a decision on exactly how it would be lifted.

Government insiders told LBC last night that no final decision had yet been made - but it was expected to be scored as part of the upcoming Budget, due at the end of November.

They stressed that the Government was looking for a move that would help lift children out of poverty, and keep the public finances on track.

Treasury officials are said to be concerned that scrapping it altogether would cost a whopping £4.5billion.

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Over the party's conference, reports suggested that Rachel Reeves is looking to "taper" the benefit limit.

That could mean fewer cash handouts for every extra child that a family has.

The group of academics and experts includes people who have worked on the government's child poverty strategy working group, Kitty Stewart, and former chief economist at the DWP, Jonathan Portes.

They say there is no similar policy in other nations.

Mr Portes told LBC: "This policy is internationally, it's an outlier.

"No other country that we know of imposes a cap on benefits after two children. It's deeply damaging, not just to the kids and families who are affected, but to the broader social and economic family fabric of our country.

"We would all be better off if child poverty was reduced. And the most efficient, the quickest, the easiest, and the most politically, morally and socially justified way of doing that would be to lift the cap. We would all be better off as a consequence of that."

And Meghan Meek-O'Connor, Head of England and Westminster for Save the Children, told us: "Child poverty costs us a lot as a country; in health costs, it means children have delayed educational achievements, it means their capacity to earn is diminished.

"It's holding us back. We need to make this investment now, and it will be a long term boost to the economy as well as an improvement to children's lives.

"Immediately it would bring 400,000 out of poverty.

"All these people who are already advising government... it's time to stand up for these children at the Budget, and make sure they have the best start in life."

The charity's warned that more than 100 kids a day are dragged into poverty as a result of the cap.

Earlier this week ministers indicated the cap is expected to be ditched.

Work and pensions minister Andrew Western told MPs: "All available levers are under consideration as part of our child poverty taskforce, which is reporting later this year.

"We will do what it takes to bear down on child poverty. There are many levers that we can look at to do that, we have pulled some already, and we will continue that work.”

And some in No10 are worried as the two-child benefit cap is popular to some voter bases that they are trying to keep on side.

A Government spokesperson said: “Our Child Poverty Taskforce will publish an ambitious strategy to tackle the root causes of child poverty.

“We are also investing £500million in children’s early development and ensuring the poorest don’t go hungry in the holidays through a new £1billion crisis support package.”

Full list of signatories to the letter:

• Professor Mary Daly, Professor of Sociology and Social Policy, University of Oxford
• Sara Davies, Associate Professor in Household Finance, University of Bristol
• Professor Danny Dorling, University of Oxford
• Professor Lee Elliot-Major OBE, Professor of Social Mobility, University of Exeter, Former CEO of The Sutton Trust
• Professor Brid Featherstone, Emeritus Professor of Social Work, University of Huddersfield
• Dr Ciara Fitzpatrick, Senior Lecturer, Law and Social Justice Institute, University of Ulster
• Sam Freedman, public policy expert
• Professor Sayantan Ghosal, Adam Smith Chair in Political Economy, University of Glasgow
• Professor Donald Hirsch, Emeritus Professor of Social Policy, Loughborough University
• Dr Stuart Hodkinson, Associate Professor of Critical Urban Geography, University of Leeds
• Professor Ruth Lister, Professor of Social Policy, Loughborough University
• Professor Eva Lloyd OBE, Professor of Early Childhood in the School of Childhood and Social Care and the Director of International Centre for the Study of the Mixed Economy of Childcare (ICMEC), University of East London
• Professor Helen Lomax, Professor of Childhood and Children’s Participation, Sheffield Hallam University
• Professor Jo Michell, Professor of Economics, UWE Bristol
• Professor Jane Millar, Emeritus Professor of Social Policy, University of Bath
• Professor Simon Mohun, Emeritus Professor of Political Economy, Queen Mary University of London
• Professor Susan Newman, Professor and former Head of Economics, The Open University
• Professor Ruth Patrick, Professor in Social and Public Policy, University of Glasgow, and Visiting Professor, Centre for Analysis of Social Exclusion (CASE), London School of Economics and Political Science
• Professor Sally Pearce, Professor of Education, Strategic Lead for Early Years and Director of the Early Years Community Research Centre, Sheffield Hallam University
• Ann Pettifor, Director of Policy Research in Macroeconomics (PRIME)
• Professor Kate Pickett, Professor of Epidemiology, University of York
• Professor Jonathan Portes, Professor of Economics and Public Policy, King’s College London, Former Chief Economist at the Department for Work and Pensions and the Cabinet Office, Former Director of the National Institute for Economic and Social Research (NIESR)
• Professor Paul Ramchandani, Professor of Education at the Play in Education, Development and Learning (PEDAL) Research Centre, University of Cambridge
• Dr Howard Reed, Senior Research Fellow, Northumbria University, Director of the economic research consultancy Landman Economics, former Chief Economist and Director of Research at the Institute for Public Policy Research
• Professor Aaron Reeves, Professor of Sociology, London School of Economics and Political Science
• Professor Josh Ryan-Collins, Professor of Economics and Finance at the UCL Institute for Innovation and Public Purpose (IIPP)
• Professor Malcolm Sawyer, Emeritus Professor of Economics, University of Leeds
• Professor Andrew Sayer, Emeritus Professor of Social Theory and Political Economy, Lancaster University
• Professor Lisa Scullion, Professor of Social Policy, University of Salford
• Dr Mark Simpson, Senior Lecturer in Law, Ulster University
• Professor Helen Stalford, Professor of Law and Social Justice, University of Liverpool
• Professor Guy Standing, Professorial Research Associate and former Professor of Development Studies, SOAS University of London
• Professor Kitty Stewart, Professor of Social Policy, London School of Economics and Political Science, and Associate Director of the Centre for Analysis of Social Exclusion (CASE)
• Professor Engelbert Stockhammer, Professor of Political Economy, King's College London
• Professor Holly Sutherland, Emeritus Professor at Institute for Social and Economic Research, University of Essex
• Professor Alexander Teytelboym, Professor of Economics, University of Oxford
• Professor Kay Tisdall, Professor of Childhood Policy, University of Edinburgh
• Dr Jan Toporowski, Progressive Economy Forum
• Professor Chris van Tulleken, Professor of Infection and Global Health, University College London
• Professor Beth Watts-Cobbe, Professor and Deputy Director, Institute of Social Policy, Housing and Equalities Research (I-SPHERE)
• Adam Smith Panmure House Fellow, Heriot-Watt University, Edinburgh