Chancellor Rachel Reeves has made a significant announcement to eliminate the two-child benefit cap, a move expected to uplift hundreds of thousands of children out of poverty.
The decision, well-received by Labour MPs, was disclosed during today’s Budget address by Ms. Reeves, who intends to scrap the policy initiated by former Conservative welfare reformer George Osborne in 2017. This policy limits child tax credits and universal credit to the first two children in a family and has been criticized for entrenching children in poverty.
During her Budget speech, Ms. Reeves emphasized that penalizing the most vulnerable children is not the solution to fixing a flawed welfare system. She labeled the two-child cap as a failed policy that exacerbates child poverty more than any other measure. She expressed empathy towards families facing hardships and highlighted various reasons, such as loss of a partner, separation, illness, or unemployment, that can lead to financial struggles for parents.
Furthermore, Ms. Reeves announced the removal of the controversial “rape clause,” which required women to claim an exemption for a child conceived through non-consensual means, labeling it as dehumanizing and cruel.
Amid cheers and gestures of approval from Labour MPs, the Chancellor assured that the removal of the two-child limit, effective from April, is fully funded. According to Office for Budget Responsibility estimates, this move is projected to cost approximately £3 billion by 2029-2030 but is also forecasted to reduce child poverty by 450,000.
The long-standing call for the abolition of this policy by Labour MPs and former Prime Minister Gordon Brown, who denounces child poverty as a national disgrace, has finally materialized. The issue caused internal rifts within the Labour Party before the general election, resulting in the expulsion of seven Labour MPs. The government is set to release a comprehensive child poverty strategy in the near future.