Why the Chancellor’s announcement on the two-child benefit cap is so important for the North - Hannah Davies
Last week’s Budget marked a turning point: ending harmful policies, investing in prevention and recognising that prosperity starts with healthy people and thriving communities. The eradication of the two-child benefit cap was hugely important - not only because it will lift around half a million innocent children out of poverty, but also because it is an essential public health measure that will have life-long impacts on children’s physical and mental health.
If we are serious about reducing costs to the public purse while growing productivity, we must invest in prevention: mental-health support, public-health programmes, better community care, and structural efforts to address inequalities. This is not just the right thing to do - it makes economic sense. Ill health in the North of England has driven down productivity in the region with the scale of the health-related economic inactivity greater in the region.
Workers in the North are more likely to lose their job due to ill health than their equivalents elsewhere, and those without educational qualifications face a ninefold higher risk of losing their job if they become ill.
In 2018, our Health for Wealth report showed tackling health inequalities between the North and the South could generate an additional £13.2bn per year. Today, this figure has risen to £18.4bn per year.
An updated version of this report shows that, today, regional inequalities in health, wages and economic inactivity have deepened In Yorkshire, average weekly wages sit at just £536 - almost £40 below the England average and more than £150 behind London.
This rise in economic inactivity in the North due to ill health, now at a record high, underscores the urgent need to put health at the heart of any strategy for sustainable economic growth.
We have a huge opportunity here. The North of England has some of the most innovative health researchers and institutions in the world offering a transformational opportunity to build the health and wealth of the country as a whole.
That’s why there was also encouraging news in the Budget on health and life sciences research.
With the NHS under pressure and the UK desperate for economic growth, investment in health research is one of the few strategies that delivers on both fronts.Yet the gap in health research funding between the North and the South East remains stark.
Our report on health research funding shows the entire North received just £405m worth of investment in health research in 2022 compared with £1.69bn awarded to London, Oxford and Cambridge. On a Combined Authority basis that’s £29 per person in West Yorkshire Combined Authority compared to £332 per person in Cambridgeshire and Peterborough Combined Authority.
With targeted investment, our world-leading universities, research-intensive NHS trusts, and growing health-tech sector could transform both regional health outcomes and the national economy in health innovation.
Prevention is at the heart of improving health and productivity.. Which takes us back to why the Chancellor’s announcement on the two-child benefit cap is so important. Our Child of the North work, produced together with the N8 Research Partnership, shows time and time again poverty drives ill health and drives down children’s life chances. The effects of the cap have driven up long-term public spending through pressures on the NHS, social care, education, and welfare - and damaged children’s life chances for decades. It is like removing the foundations of a house to save money on bricks: the collapse is inevitable and repairing the damage costs far more.
For many households in Yorkshire, where child poverty rates are now at their highest since the turn of the millennium, this decision will have an immediate, life-changing impact. Around half a million children are expected to be lifted out of poverty the moment the policy ends. That means a more secure environment for children growing up within parts of Yorkshire, where, in some areas, one in two children live in poverty, that transformation cannot come soon enough.
Voices in the North, including Health Equity North, have consistently called for the cap’s removal. For almost four years, we have contributed to an evidence base, gained cross-party support, and ensured that the human cost of this policy could not be ignored with our work alongside the Child of the North All-Party Parliamentary Group bringing the issue to the centre of Westminster.
Yet as welcome as this moment is, it cannot be mistaken for a solution to child poverty. It is a correction - a long-overdue one - not a cure for the structural inequalities facing vulnerable families. If the Government is serious about change, it must now commit to a long-term, cross-sector health inequalities strategy that tackles the root causes of poverty: low pay, insecure work, unaffordable childcare, unaffordable housing, and the persistent regional inequalities that hold northern communities back.
Progress doesn’t happen by chance. It happens because people speak up and others listen. Advocates, researchers, charities, mayors, MPs, and communities in the North of England have consistently banged the drum for change backed by evidence of what works. This moment shows what evidence, persistence and collective advocacy can achieve. But we also know there is more to do to achieve the healthier, wealthier and fairer North for ourselves and our children.
Hannah Davies is the CEO of the Northern Health Science Alliance and Executive Director of Health Equity North.