Labour is exploring the possibility of eliminating the contentious two-child benefit restriction and introducing a new gradual system. This move is part of various options being considered by Chancellor Rachel Reeves to replace the austerity policy from the Tory era, which has been criticized for contributing to child poverty.
Government sources have clarified that no final decision has been made on this matter, as the child poverty taskforce, established by Keir Starmer, is still finalizing its recommendations. The potential changes could involve replacing the existing two-child benefit limit, which currently limits Child Tax Credits and Universal Credit to the first two children in a family. One proposed option is a new tapered payment structure where parents would receive higher benefits for the first child and reduced amounts for subsequent children.
Additionally, the Treasury is reportedly assessing ways to alleviate the impact of the two-child benefit restriction by extending benefits to families with three or four children. Child poverty advocacy groups have been calling for the complete removal of this policy, introduced under George Osborne, to help lift hundreds of thousands of children out of poverty.
When questioned about the two-child benefit limit, the Prime Minister expressed commitment to reducing child poverty. He highlighted the government’s initiatives such as free breakfast clubs in primary schools and expanding eligibility for free school meals as steps towards this goal.
Regarding the potential scrapping of the two-child benefit cap, Labour’s Rachel Reeves did not confirm the plans during a discussion at the party conference. She emphasized that policies to address child poverty would be outlined in the upcoming Budget, following Keir Starmer’s pledge to tackle the issue during this parliamentary term.
Lord John Bird, founder of Big Issue and a crossbench peer, welcomed the proposed changes but cautioned that more decisive actions were needed to combat entrenched child poverty effectively. He stressed the importance of setting clear targets and implementing robust measures to address the ongoing poverty crisis.
Jen Clark from Amnesty International UK criticized the two-child benefit cap as a harsh aspect of the UK’s welfare system that contributes significantly to child poverty. She advocated for its complete removal as part of broader reforms to ensure adequate support for all individuals and families facing financial hardships.