Why Cameron has rejected Nadhim Zahawai's child benefit plan

The Tory MP's plan to limit all child-related benefits to two children would undermine the 'striver'/'scrounger' divide by hitting all families, regardless of their employment status.

Earlier this week, George Osborne vowed to cut "billions" more from welfare if the Tories win the next election. In an op-ed in today's Mail on Sunday, Conservative MP Nadhim Zahawi suggests one way he could do so. The No. 10 policy board member calls for the government to limit all "child-related welfare" to "the first two children". Here's the key passage:

This would include Child Benefit and Child Tax Credit but would exclude disability payments.

It would apply to all households, both in and out of work, and only to new births after the change became law. Capping welfare at two children may seem tough, but setting the cap at three simply wouldn’t deliver the savings we need.

At first sight, this might merely appear to be a restatement of the proposal previously floated by Iain Duncan Smith. The Work and Pensions Secretary said in September 2012: "My view is that if you did this you would start it for those who begin to have more than say two children. Essentially it's about the amount of money that you pay to support how many children, and what is clear to the general public, that they make decisions based on what they can afford for the number of children they have. That is the nature of what we all do."

But there are several key differences with the Duncan Smith plan, which was vetoed by the Lib Dems before the 2012 Autumn Statement. The first is that Zahawi's cap would apply to all child-related benefits, rather than child benefit alone. The second is that it would apply to all families, rather than just those claiming out-of-work benefits. It's the latter point that explains why No. 10 has been quick to stamp on the idea, with a source commenting: "this is not government policy and is not supported by the prime minister."

Were the Tories to limit child-related benefits for all families, regardless of their employment status, it would undermine the 'striver'/'scrounger' divide they have worked so hard to create. As Grant Shapps said of the Duncan Smith plan earlier this year: "A lot of people worry that the way welfare operated under the last government meant claimants were free from taking the difficult decisions you would take if you are in work – none more starkly obvious than when you have children.

"If you are a working family and you have another child, you know it’s going to mean quite a severe impact on your living costs. Yet in the welfare system, it’s almost turned on its head, so additional children are actually recognised, with no limit. We need to create a choice for people on welfare which mirrors that which millions of people in work who aren’t receiving state support have to make. It’s only fair to the taxpayer."

This, of course, is nonsense. There is no evidence that significant numbers of families have more children merely to claim benefits and nor is it clear why it would be a less "difficult decision" for them to do so (unlike in-work families, they cannot draw on private salaries as well as social security). But Shapps rightly believes there is a ready audience for his rhetoric.

While the Duncan Smith proposal would help to reinforce the artificial divide created between "working" and "workless" families (owing to the insecure labour market, many cycle in and out of work), the Zahawi plan would undermine it. For that reason, while the former idea will almost certainly appear in the next Tory manifesto, the latter will not.

David Cameron talks during a PM Direct event at the Tetley Tea factory in Darlington on December 13, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Ukip's Nigel Farage and Paul Nuttall. Photo: Getty
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Is the general election 2017 the end of Ukip?

Ukip led the way to Brexit, but now the party is on less than 10 per cent in the polls. 

Ukip could be finished. Ukip has only ever had two MPs, but it held an outside influence on politics: without it, we’d probably never have had the EU referendum. But Brexit has turned Ukip into a single-issue party without an issue. Ukip’s sole remaining MP, Douglas Carswell, left the party in March 2017, and told Sky News’ Adam Boulton that there was “no point” to the party anymore. 

Not everyone in Ukip has given up, though: Nigel Farage told Peston on Sunday that Ukip “will survive”, and current leader Paul Nuttall will be contesting a seat this year. But Ukip is standing in fewer constituencies than last time thanks to a shortage of both money and people. Who benefits if Ukip is finished? It’s likely to be the Tories. 

Is Ukip finished? 

What are Ukip's poll ratings?

Ukip’s poll ratings peaked in June 2016 at 16 per cent. Since the leave campaign’s success, that has steadily declined so that Ukip is going into the 2017 general election on 4 per cent, according to the latest polls. If the polls can be trusted, that’s a serious collapse.

Can Ukip get anymore MPs?

In the 2015 general election Ukip contested nearly every seat and got 13 per cent of the vote, making it the third biggest party (although is only returned one MP). Now Ukip is reportedly struggling to find candidates and could stand in as few as 100 seats. Ukip leader Paul Nuttall will stand in Boston and Skegness, but both ex-leader Nigel Farage and donor Arron Banks have ruled themselves out of running this time.

How many members does Ukip have?

Ukip’s membership declined from 45,994 at the 2015 general election to 39,000 in 2016. That’s a worrying sign for any political party, which relies on grassroots memberships to put in the campaigning legwork.

What does Ukip's decline mean for Labour and the Conservatives? 

The rise of Ukip took votes from both the Conservatives and Labour, with a nationalist message that appealed to disaffected voters from both right and left. But the decline of Ukip only seems to be helping the Conservatives. Stephen Bush has written about how in Wales voting Ukip seems to have been a gateway drug for traditional Labour voters who are now backing the mainstream right; so the voters Ukip took from the Conservatives are reverting to the Conservatives, and the ones they took from Labour are transferring to the Conservatives too.

Ukip might be finished as an electoral force, but its influence on the rest of British politics will be felt for many years yet. 

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