Chancellor Rachel Reeves has made a significant announcement to eliminate the two-child benefit limit, a move that is expected to bring hundreds of thousands of children out of poverty.
The decision, revealed during the Budget session, received applause from Labour MPs. Chancellor Reeves declared the abolishment of the policy initially introduced by George Osborne in 2017, which restricted child tax credits and universal credit to the first two children in a family, trapping many children in poverty.
During her Budget speech, Chancellor Reeves emphasized that penalizing the most vulnerable children is not a solution for the broken welfare system. She highlighted that the two-child cap has been ineffective and unjust, pushing children into poverty. She acknowledged the challenges families face and stated that children should not suffer the consequences of difficult circumstances such as the loss of a partner, separation, illness, or unemployment.
Furthermore, Chancellor Reeves confirmed that the removal of the “vile” rape clause, which required women to claim an exemption for a child resulting from non-consensual conception, will be implemented.
Addressing the issue, Chancellor Reeves expressed her pride in being the first female Chancellor of the Exchequer and vowed to eliminate the dehumanizing and cruel ‘rape clause’ from the statute book.
Amid cheers and support from Labour MPs, Chancellor Reeves announced the fully costed and funded removal of the two-child limit starting from April. The move is also expected to address fraud and errors in the welfare system, crackdown on tax avoidance, and reform gambling taxation.
According to Office for Budget Responsibility estimates, eliminating the policy will incur a cost of approximately £3 billion by 2029-2030 but is projected to reduce child poverty by 450,000.
Labour MPs, along with former Prime Minister Gordon Brown, a vocal advocate against child poverty, have long campaigned for the removal of this policy. The issue caused internal conflicts within Labour ranks and resulted in seven MPs losing party membership last summer. The government is set to release a comprehensive child poverty strategy in the upcoming days.