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What would be the financial impact of abolishing the two-child limit?
Abolishing the two-child limit could have significant financial implications. According to the Institute for Fiscal Studies, scrapping this policy could cost the government over £3 billion annually. This expenditure is aimed at lifting approximately 620,000 children out of poverty, making it a potentially cost-effective solution to a pressing social issue.
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How does the £3 billion cost of scrapping the limit break down?
The estimated £3 billion cost of abolishing the two-child limit primarily stems from increased child tax credits and universal credit payments to families with more than two children. The Institute for Fiscal Studies suggests that reversing this policy could lift around 540,000 children out of absolute poverty, indicating that the financial outlay could lead to substantial social benefits.
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What are the potential savings or costs to the government?
While the immediate cost of scrapping the two-child limit is projected at over £3 billion, there could be long-term savings associated with reduced child poverty. By alleviating financial strain on families, the government may see decreased reliance on other welfare programs and potential improvements in children's health and education outcomes, which could ultimately reduce public spending.
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How might this affect taxpayers?
If the two-child limit is abolished, taxpayers may face increased government spending, as the £3 billion cost would likely be funded through taxation. However, proponents argue that investing in child welfare could lead to a more productive future workforce, potentially benefiting taxpayers in the long run through economic growth and reduced social costs.
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What are the broader implications for welfare reform?
The discussion around the two-child limit is part of a larger conversation about welfare reform and fiscal responsibility. As child poverty rates rise, particularly among larger families, the government must balance the need for fiscal control with the moral imperative to support vulnerable populations. This ongoing debate will shape future policies and their financial implications.