Chancellor Rachel Reeves has indicated that she plans to abolish the two-child benefit cap entirely in the upcoming Budget, stating that children should not be penalised for being part of larger families. In an interview with BBC Radio 5 Live, Reeves argued that the cap unfairly targets children whose parents may face circumstances beyond their control, such as chronic illness or bereavement.
“I don’t think we can lose sight of the costs to our economy in allowing child poverty to go unchecked,” Reeves said. “And, in the end, a child should not be penalised because their parents don’t have very much money.” She emphasised that families often change shape and size for various reasons, and that it is not right to penalise a child simply for being in a bigger family.
The comments represent a significant shift from earlier reports, which suggested Reeves would only mitigate the cap’s impact, possibly by introducing a three-child limit. The Treasury had been considering compromise options, but Reeves’s remarks strongly imply full abolition. The move follows lobbying from former Prime Minister Gordon Brown, who has campaigned against the cap.
Prime Minister Keir Starmer has consistently supported lifting the cap as the most effective way to reduce child poverty, despite opposition from some aides and ministers. An ally told the Guardian: “Keir has always said he wants to drive down child poverty in government. It would mortify him if it went up on his watch. He’s adamant that it will dwarf what Blair did to reduce child poverty in government. It really matters to him.”
The two-child benefit cap, introduced by the Conservatives in 2017, limits child tax credit and universal credit to the first two children in most families. Labour has pledged to tackle child poverty, with Reeves noting that the last Labour government “proudly reduced child poverty” and that this government will do the same.
