Chancellor Rachel Reeves has made a significant announcement to eliminate the two-child benefit limit, a move expected to uplift hundreds of thousands of children out of poverty. This decision, revealed during the Budget session, received applause from Labour MPs as Ms. Reeves unveiled the plan to abolish the policy established by George Osborne in 2017. The existing rule restricts child tax credits and universal credit to only the first two children in a family, a measure widely criticized for exacerbating child poverty.
During the Budget presentation, Ms. Reeves emphasized the government’s stance on welfare, stating, “We do not believe in punishing the most vulnerable children to fix a broken welfare system.” She highlighted the failure of the two-child cap to address poverty issues and expressed empathy towards families facing hardships due to various reasons such as bereavement, separation, illness, or unemployment. Ms. Reeves also vowed to eliminate the controversial “rape clause,” describing it as a dehumanizing and cruel provision that will be stricken from the law.
In response to the cheers and support from Labour MPs, the Chancellor further declared, “I am pleased to announce the full removal of the two-child limit effective from April, thanks to measures aimed at tackling fraud, tax evasion, and reforming gambling taxation.” While the removal of the policy is estimated to cost £3 billion by 2029-2030 according to the Office for Budget Responsibility, it is projected to decrease child poverty by 450,000.
The decision to scrap the two-child limit has been a longstanding demand from Labour MPs and former Prime Minister Gordon Brown, who previously condemned child poverty as a national disgrace. The issue had sparked internal conflicts within the Labour party leading to the expulsion of seven MPs last year. Additionally, the government is set to release a detailed child poverty strategy in the near future, addressing the pressing concerns around this critical social issue.
