Labour is reportedly contemplating removing the two-child benefit limit, a measure that restricts Universal Credit and Child Tax Credit to the first two children in most households. This cap, introduced by the Conservatives in April 2017, has been criticized by campaigners for contributing to poverty by denying assistance to struggling families.
Data from the Department for Work and Pensions reveals that nearly 1.7 million children in 469,780 households are impacted by the two-child limit. While no official decision has been announced by Labour yet, potential changes to the benefit system could be disclosed during the Autumn Budget on November 26.
Reports suggest that the two-child benefit limit might be replaced with a new system where parents receive reduced benefits for each additional child. The Treasury is also considering options such as limiting additional benefits to three or four children or lifting the cap for working parents on Universal Credit.
Chancellor Rachel Reeves has been cautioned by Treasury officials that completely removing the two-child benefit cap could cost around £3.5 billion. When asked about potentially lifting the cap at the Budget, she emphasized the need to address child poverty effectively while being transparent about funding sources.
Prime Minister Boris Johnson expressed personal determination to combat child poverty during his tenure, highlighting the importance of reducing this issue under the current Labour government. Emphasizing the government’s commitment to lowering child poverty, he reiterated the significance of this goal both as a policy and a personal mission.
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