Labour is reportedly contemplating eliminating the two-child benefit limit. This cap, introduced by the Conservatives in April 2017, restricts Universal Credit and Child Tax Credit to the first two children in most households. Critics argue that this policy exacerbates poverty by withholding support from struggling families.
Data from the Department for Work and Pensions reveals that approximately 1.7 million children across 469,780 households are affected by the two-child limit. While no official decision has been announced by Labour yet, any potential alterations to the benefit system are anticipated to be disclosed during the Autumn Budget on November 26.
Government officials emphasize that no concrete decisions have been made. Reports suggest that the two-child benefit limit might be replaced with a new system that reduces the amount of cash parents receive per child. The Treasury is also exploring options such as limiting additional benefits to three or four children or lifting the cap for working parents on Universal Credit exclusively.
Chancellor Rachel Reeves has been cautioned by Treasury officials that abolishing the two-child benefit cap entirely could incur a cost of approximately £3.5 billion. When asked about potentially lifting the cap at the Budget, she indicated that specific policies to reduce child poverty would be outlined in due course.
Prime Minister, speaking to The Mirror politics team, expressed personal determination to combat child poverty, stating that it is a priority for the government. He emphasized the importance of reducing child poverty and reiterated his commitment to achieving this goal.