Chancellor Rachel Reeves has indicated she intends to scrap the two-child benefit cap entirely, telling the BBC that no child should be “penalised because they are in a bigger family through no fault of their own.” In an interview on Radio 5 Live, Reeves said it is unfair to penalise children in larger families and warned of the economic costs of unchecked child poverty.
The comments go beyond previous speculation that Reeves would merely soften the cap in the upcoming Budget. The Treasury had been considering compromise options, such as a three-child limit, but Reeves’s remarks suggest full abolition is now the plan. The shift follows intense lobbying from former prime minister Gordon Brown.
A source close to Sir Keir Starmer said the prime minister has consistently told colleagues he wants to lift the cap as the most effective way to drive down child poverty. “He’s adamant that it will dwarf what Blair did to reduce child poverty in government. It really matters to him,” the ally said. Starmer reportedly views rising child poverty on his watch as a personal failure.
Reeves emphasised the range of circumstances that can lead families to have three or four children, including chronic illness or bereavement. “I don’t think it’s right that a child is penalised because they are in a bigger family through no fault of their own,” she said. The last Labour government had reduced child poverty, and Reeves pledged to do the same.
