The Labour government has announced the elimination of the controversial two-child benefit cap, a policy change that will remove 450,000 children from poverty by the end of the decade. Prime Minister Keir Starmer refused to apologize for the decision, which will cost £3 billion annually by 2029-30, calling it a fulfillment of his “longstanding ambition” rather than a recent political maneuver.
The benefit cap has long been identified by charities and Labour MPs as the single biggest driver of child poverty in the United Kingdom. Its removal represents a significant shift in social policy, addressing concerns that have been raised consistently since the cap was introduced. Chancellor Rachel Reeves described the measure as a “good investment” in children’s futures, emphasizing that most affected families have working parents.
However, the policy change comes alongside £26 billion in tax increases, including an extension of the freeze on income tax and national insurance thresholds for three more years. This has sparked debate about whether Labour has broken its campaign promise not to raise taxes on working people. Both Starmer and Reeves argue the government has maintained its manifesto commitments while making necessary fiscal adjustments.
The decision has created a political divide, with shadow chancellor Mel Stride criticizing the move as making benefits “more attractive” and potentially leading to 25,000 more people claiming welfare. The Conservative MP argued that benefit recipients should face similar financial decisions as working taxpayers and proposed alternative measures including £23 billion in welfare cuts and abolishing stamp duty on primary residences.
Despite the controversy, government officials maintain that the budget represents a fair approach to raising revenue while protecting vulnerable children. The combination of targeted tax increases on gambling companies, wealthy property owners, and landlords alongside the benefit cap removal demonstrates an attempt to balance fiscal responsibility with social justice priorities.