Don’t make parents pay for pints

This week, Reform unveiled a daring new policy proposal to tackle one of the most momentous issues facing Britain today: that of the inevitable ten-pound pint and the subsequent shuttering of the Great British pub. Their five-point plan to save the pubs would see reductions of 10 per cent in both beer duty and VAT for the entire hospitality sector, while abolishing business rates for pubs, exempting hospitality businesses from Rachel Reeves’s hikes in employer National Insurance contributions, and drastically cutting the regulation of the industry. 

The plans, it is reported, could see the price of a pint fall by as much as … five pence. The price of a pint is extortionate, and any policy that would seek to reduce it should be welcomed, however such savings are meaningless in a context where the wholesale price of pints like Guinness are being increased by four pence per pint due to increasing costs elsewhere on the production chain. It is imperative that pubs are able to continue being places of respite for the world-weary like myself, without being reduced to the unfortunate chimera that is the gastropub with its reserved tables and loud music. Rate and duty cuts are to be welcomed, but they must be much more radical. 

My issue, however, is not with the five-point plan itself, but rather with how Reform would hope to pay for it. They have said that the full cost of the proposal — almost £3 billion by the fourth year — would be funded by reinstating the two-child benefits cap.

The cap, introduced in 2017 under the Welfare Reform and Work Act, limits child-related elements of Universal Credit to the first two children in a household, with few exceptions. A bill that would remove the limit, allowing the “child element” of Universal Credit amounting to around £3,650 per child to be available for all children in a household, was passed at Second Reading this week. The Institute for Fiscal Studies estimated that removing this limit would mean an increase in welfare spending of £3.4 billion.

It is no secret that Britain’s welfare expenditure is far too high, and that the generosity with which our increasingly destitute state hands out free money is making the population increasingly unlikely to want to work. Unlike much of welfare spending, however, lifting the two-child benefit cap would have a tangible, positive impact on our society by playing its part in ameliorating an issue even greater than that of the decline of the British pub: the declining birth rate.

During Covid, it was reported that approximately six in ten pregnant women who already had two or more children ended a subsequent pregnancy due to financial restrictions that they would face under the two-child benefit cap. The report, based on research conducted by the British Pregnancy Advisory Service, the largest provider of abortions in Britain, found that 57 per cent of respondents felt that the restrictions were an important push factor in ending their pregnancies.

One respondent said the two-child benefit cap was “a big factor” due to having a tight budget as a result of losing a job, making having another child unaffordable, while another respondent admitted, “If there was no two-child limit I would have kept the baby, but I couldn’t afford to feed and clothe it.”

Such a benefit cap is anti-natalist by definition and, subsequently, is anti-growth

This ought to trouble even those who are aware of Britain’s bloated welfare system. If such a system nudges women towards abortion by making it too expensive to have children, how can we realistically expect to fix our falling birth rate when the nation’s economic fortunes are not increasing enough to obviate the necessity of such child benefits? Such a benefit cap is anti-natalist by definition and, subsequently, is anti-growth, due to the country’s misguided reliance on mass immigration — a fiscal net negative — to solve the issues posed by a drastically declining birth rate. 

Not only is reintroducing the two-child benefit cap a bizarre policy decision on its own grounds, but it does not logically link to its objective of saving the pubs. Encouraging growth of the hospitality sector that relies on discretionary spending should not be financed through cuts to support for families with children. There is no inherent connection between child benefits and beer prices, and the idea of leaving poor families worse off to make booze slightly cheaper makes it appear as if the Party has its priorities wrong. 

If Reform did want to simultaneously reduce the welfare burden while reducing the price of a pint, one place they could focus would be on the Motability scheme, which the Adam Smith Institute found to be costing £3.4 billion more each year than necessary — the exact amount that lifting the two-child benefit would cost. Maintaining the removed cap and cracking down on Motability would leave Britain in the same place fiscally, but with families better off and more children being born. 

Indeed, £3.4 billion in welfare savings is small change when considering Reform’s broader welfare reform proposals — the most striking of which is the plan to prohibit foreign nationals from receiving benefits, which has been touted as saving the country £234 billion. This would both reduce the welfare burden and reduce immigration, freeing up more jobs and homes while contributing to economic growth. 

Reform is right to focus on ensuring that British pubs survive for generations to come, but to fund their continued existence by denying income support to some of the country’s poorest families isn’t a sensible choice, economically or culturally. There are plenty of savings to be had by cutting waste and refraining from spending like we did in years gone by, and plenty of policy proposals out there to achieve this. 

On a positive note, a quarter of Reform’s MPs voted to lift the two-child benefit cap this week by appearing to accidentally get stuck in the wrong voting lobby. The road to heaven, it appears, is paved with bad intentions.