Labour is exploring the possibility of eliminating the contentious two-child benefit cap and introducing a new graduated system. This potential change is part of a range of options being reviewed by Chancellor Rachel Reeves to replace the austerity measure from the Conservative era, which has been criticized for exacerbating child poverty.
While no final decision has been made, government officials emphasized the ongoing work of the child poverty taskforce, established by Keir Starmer. There are considerations to revamp the existing two-child benefit limit, which currently restricts benefits like Child Tax Credits and Universal Credit to the first two children in a family. One proposal involves implementing a tapered rate, where parents would receive more financial support for their first child and progressively less for additional children.
The Treasury is also examining the possibility of mitigating the impact of the two-child benefit limit by extending benefits to families with three or four children. Child poverty advocacy groups have long called for the complete abolition of this policy, originally introduced by George Osborne, to uplift hundreds of thousands of children out of poverty.
In response to inquiries about the two-child benefit cap, the Prime Minister stated a commitment to reducing child poverty. He highlighted initiatives such as free breakfast clubs in primary schools and broadening eligibility for free school meals as part of the government’s efforts.
Regarding the potential scrapping of the two-child benefit cap, Rachel Reeves refrained from confirming any specific plans during a Labour party conference event. She indicated that details on policies, including the budgetary implications, would be outlined in the Budget, aligning with Keir Starmer’s pledge to reduce child poverty within this parliamentary term.
Lord John Bird, founder of the Big Issue and a crossbench peer, welcomed the reported discussions but urged for a more comprehensive approach to eradicate child poverty fully. He emphasized the importance of setting measurable targets to sustain progress and address the deep-rooted issues perpetuating child poverty.
Jen Clark from Amnesty International UK criticized the two-child benefit cap as a harsh element of the UK’s benefit system that contributes to child poverty. She advocated for its complete removal, calling for broader reforms in the social security system to ensure adequate support for all individuals and prevent families from facing distressing choices between basic needs.