Chancellor Rachel Reeves has made an announcement to eliminate the two-child benefit restriction, a decision expected to bring hundreds of thousands of children out of poverty. This move was met with approval from Labour MPs during the Budget session today, where Reeves declared the end of the policy implemented by former Conservative welfare reformer George Osborne in 2017. The policy, which limits child tax credits and universal credit to the first two children in a family, has been criticized for contributing to child poverty.
During her Budget speech, Chancellor Reeves expressed opposition to punishing the most vulnerable children as a solution to a flawed welfare system. She referred to the two-child cap as a failed policy that exacerbates child poverty more than any other measure. Reeves emphasized that families facing hardships often have valid reasons for their circumstances, such as the loss of a partner, separation, illness, or unemployment, and children should not suffer the consequences.
Additionally, Reeves mentioned that the removal of the “vile” rape clause, which required women to seek an exemption for a child born from non-consensual conception, will be included in the changes. As the first female Chancellor of the Exchequer in Britain, she stated her commitment to ending the dehumanizing and cruel aspects of the rape clause.
Labour MPs welcomed the announcement with enthusiasm, urging for more positive changes. Reeves assured that the elimination of the two-child limit, effective from April, is fully funded and supported by measures to combat welfare fraud, tax evasion, and gambling taxation. According to Office for Budget Responsibility projections, the removal of the policy is estimated to cost £3 billion by 2029-2030 but is expected to reduce child poverty by 450,000.
The decision to scrap the two-child limit has been a long-standing demand from Labour MPs and former Prime Minister Gordon Brown, who has strongly criticized child poverty as a national disgrace. The issue had caused internal divisions within Labour ranks before the general election, leading to the expulsion of seven Labour MPs last summer. The government plans to unveil a comprehensive child poverty strategy in the near future.
