Rishi Sunak pledges to keep child benefit cap if Tories win next election
Rishi Sunak has revealed he will keep the two-child benefit cap if the Conservatives win the next election.
The policy limits the benefits parents on Universal Credit can claim for their children.
Writing in The Sun on Sunday, the prime minister said: “Working families do not see their incomes rise when they have more children.
“Families on benefits should be asked to make the same financial decisions as those supporting themselves solely through work.”
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Mr Sunak confirmed the pledge to keep the cap, which was introduced in 2017, would be in the Tory election manifesto.
This is the second manifesto commitment the Conservatives have made public, with the first being to keep the triple lock on pensions.
It would reportedly cost an estimated £1.5bn to lift the cap.
Over the years, some Labour Party MPs and charities have called for the cap to be scrapped, but Sir Keir Starmer has previously stated that the party would not overturn the cap under his leadership.
Child benefit is money paid to parents or guardians who are responsible for raising a child.
There are no specific age rules for the person making the claim, and it isn’t means-tested.
It is paid at two different rates: £24 a week for your eldest child and £15.90 a week for each other child.
But, you can be liable for a tax charge if you earn over a certain amount.
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High income child benefit charge threshold raised to £60,000
Under the current rules, if either you or your partner have an individual income of £50,000 or more and you receive child benefit, you are liable to pay the high-income child benefit tax charge.
The charge is equal to 1% of the total child benefit received for every £100 earned over £50,000.
Once you earn £60,000, the charge equals all the benefits you’d receive, so you get nothing.
However, Jeremy Hunt announced a rise in the threshold in the spring budget, increasing them to £60,000 (that’s when you start losing out) and £80,000 (when you get nothing) respectively.
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From 6 April, you’ll be charged 1% of your child benefit for every £200 of income that exceeds £60,000 – up until £80,000.
Earlier this week, the prime minister said that people who are fit to work but do not accept job offers will have their benefits taken away after 12 months.
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Outlining his plans to reform the welfare system if the Conservatives win the next general election, Mr Sunak said “unemployment support should be a safety net, never a choice” as he promised to “make sure that hard work is always rewarded”.
Mr Sunak said his government would be “more ambitious about helping people back to work and more honest about the risk of over-medicalising the everyday challenges and worries of life” by introducing a raft of measures in the next parliament.
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Politics
Row over how many farms will be affected by inheritance tax policy – as PM doubles down ahead of farmers protest
Sir Keir Starmer has insisted the “vast majority of farmers” will not be affected by changes to Inheritance Tax (IHT) ahead of a protest outside parliament on Tuesday.
It follows Chancellor Rachel Reeves announcing a 20% inheritance tax that will apply to farms worth more than £1m from April 2026, where they were previously exempt.
But the prime minister looked to quell fears as he resisted calls to change course.
Speaking from the G20 summit in Brazil, he said: “If you take a typical case of a couple wanting to pass a family farm down to one of their children, which would be a very typical example, with all of the thresholds in place, that’s £3m before any inheritance tax is paid.”
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The comments come as thousands of farmers, including celebrity farmer Jeremy Clarkson, are due to descend on Whitehall on Tuesday to protest the change.
And 1,800 more will take part in a “mass lobby” where members of the National Farmers’ Union (NFU) will meet their MPs in parliament to urge them to ask Ms Reeves to reconsider the policy.
Speaking to broadcasters, Sir Keir insisted the government is supportive of farmers, pointing to a £5bn investment announced for them in the budget.
He said: “I’m confident that the vast majority of farms and farmers will not be affected at all by that aspect of the budget.
“They will be affected by the £5bn that we’re putting into farming. And I’m very happy to work with farmers on that.”
Sir Keir’s spokesman made a similar argument earlier on Monday, saying the government expects 73% of farms to not be affected by the change.
Environment, Farming and Rural Affairs Secretary Steve Reed said only about 500 out of the UK’s 209,000 farms would be affected, according to Treasury calculations.
However, that number has been questioned by several farming groups and the Conservatives.
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The NFU said the real number is about two-thirds, with its president Tom Bradshaw calling the government’s figures “misleading” and accusing it of not understanding the sector.
The Country Land and Business Association (CLA) said the policy could affect 70,000 farms.
Conservative shadow farming minister Robbie Moore accused the government last week of “regurgitating” figures that represent “past claimants of agricultural property relief, not combined with business property relief” because he said the Treasury does not have that data.
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Agricultural property relief (APR) currently provides farmers 100% relief from paying inheritance tax on agricultural land or pasture used for rearing livestock or fish, and can include woodland and buildings, such as farmhouses, if they are necessary for that land to function.
Farmers can also claim business property relief (BPR), providing 50% or 100% relief on assets used by a trading business, which for farmers could include land, buildings, plant or machinery used by the business, farm shops and holiday cottages.
APR and BPR can often apply to the same asset, especially farmed land, but APR should be the priority, however BPR can be claimed in addition if APR does not cover the full value (e.g. if the land has development value above its agricultural value).
APR and BPR can apply to farmland, which the Conservatives say has been overlooked by the Treasury in compiling its impact figures. File pic: iStock
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Mr Moore said the Department for the Environment, Farming and Rural Affairs (DEFRA) and the Treasury have disagreed on how many farms will be impacted “by as much as 40%” due to the lack of data on farmers using BPR.
Lib Dem MP Tim Farron said last week1,400 farmers in Cumbria, where he is an MP, will be affected and will not be able to afford to pay the tax as many are on less than the minimum wage despite being asset rich.
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