REMOVING caps on benefits could save the government billions of pounds rather than cost money, a progressive economic think tank says.
The New Economics Foundation (NEF) report, published today, says that the cost of benefit caps could be outweighed by the gains to be made from abolishing them.
Gains include easing extra pressure on the NHS and other services resulting from the poverty caused by the caps, according to the experts.
The benefit cap was introduced in 2013 by the Conservative and Liberal Democrat coalition government and limits the amount of benefits a household can receive.
The two-child limit was introduced by the Tory government in 2017. It restricts the application of child tax credit and universal credit to the first two children in households.
The NEF estimates that axing the caps could save £1.5 billion a year over the next five years alone through lower demand on public services.
In the longer term — in 20 or 25 years — children lifted from poverty could have estimated future net earnings of £920 million a year higher, with an extra £490m returned to government through taxation and reduced spending on social security.
“In reducing child poverty rates, pressures on the NHS, schools and social services will reduce, enabling the reallocation of resources to other areas of high demand,” the report states.
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