According to the Guardian, Britain’s finance minister Rachel Reeves aims to eliminate the two-child limit on welfare payments in her upcoming November 26 budget.
This budget is pivotal for Labour, marking a challenging beginning after their landslide win last year, which ended a 14-year hiatus from power.
The party is balancing a commitment to fiscal discipline to reassure financial markets and a pledge to improve living standards, which secured voter support.
“We will reduce child poverty this parliament,” Reeves stated at a Labour Party conference in Liverpool, addressing the report.
“We’ll detail these policies in the budget. We’ve been clear that policy commitments require a funding explanation.”
The Guardian noted that lifting the cap could be a key measure to help hundreds of thousands of children out of poverty.
Removing the cap, which limits welfare for most parents to two children, could cost about 3 billion pounds ($4.03 billion) annually, says the Institute for Fiscal Studies (IFS).
IFS research suggests this change could lift 500,000 children from absolute poverty.
The Guardian reported the finance ministry is considering options like limiting benefits to three or four children, tapering payments, or lifting the cap for working parents on income support.
Post-election in July 2024, Labour initially upheld the two-child cap, introduced by the prior Conservative government, citing necessary fiscal repairs.
In May, the government announced it was reviewing the two-child limit alongside other unpopular policies.
