In a landmark move hailed as transformational for family welfare, Chancellor Rachel Reeves has used her Budget to abolish the controversial two-child benefit cap.
Abolishing a Punitive Policy
Delivering her statement, the Chancellor declared she would not "preside over a status quo that punishes children", confirming the policy's removal effective from April. The two-child limit, introduced by the Conservative government in 2015 and implemented in 2017, had restricted child tax credit and universal credit payments to the first two children in most households.
Funding and Far-Reaching Impact
The significant policy shift is projected to have a profound effect, with estimates suggesting it will reduce child poverty by 450,000 by the 2029-30 financial year. The Treasury confirmed the measure will cost approximately £3 billion by the end of this Parliament.
To fund this change, the government will draw revenue from a suite of measures designed to ensure fiscal responsibility. These include reforms to gambling taxes, a crackdown on welfare system fraud, and intensified action against tax avoidance.
Campaigners Celebrate a Major Victory
The decision has been met with widespread acclaim from anti-poverty campaigners and leading charitable organisations. The Child Poverty Action Group and Unicef UK were among those who welcomed the news, describing it as a "major, necessary decision" and a "transformational" step forward for children's wellbeing across the UK.
This reversal marks one of the most significant social policy changes in recent years, directly addressing a measure that critics argued unfairly impacted the poorest families and their children.
