Labour is STILL refusing to scrap the two-child benefit cap

Despite repeated pledges to tackle the deepest injustices, the Labour Party government has so far refused to scrap the two‑child benefit cap—a stubborn policy that continues to punish low‑income families and trap countless children in poverty. Now, a new report has shamed Keir Starmer over the cap – but will he and his government bother to act?

Scrap the two-child benefit cap

The Poverty Strategy Commission is a cross-party group looking at poverty. Now, as the Guardian reported it has called on the government to abolish the two‑child benefit cap—a rule denying roughly £3,500 annually for every third or subsequent child in households claiming Universal Credit. That means 1.7 million children are presently affected by this punitive rule.

The Commission said that reversing the cap, coupled with strengthened investments in housing, childcare, and Universal Credit, could lift 4.2 million people out of poverty, including 2.2 million trapped in deep poverty—a figure that should shame any government that claims to put fairness first.

Yet remarkably, despite widespread consensus on the cap’s cruelty, the Labour government remains unmoved, citing fiscal constraints and failing to deliver any timeline for change.

This inaction comes at enormous human cost. Recent data show that the policy has plunged at least 350,000 children into poverty, while another 700,000 kids have been pushed into deeper hardship. That means over a million young lives are made permanently harder by a benefit rule that could be reversed tomorrow if political will existed.

Critics are right to call the cap “brutal” and “shameful”. Meanwhile, charities such the Child Poverty Action Group are ramping up pressure.

A May 2025 poll revealed that 73% of the public believe every child deserves a good childhood regardless of cost, and 71% say children should be prioritized in government investment—sentiments clearly at odds with Labour’s current posture.

The government says…

In response to the Commission’s report on the two-child benefit cap, a government spokesperson told the Guardian:

This government is determined to drive down poverty and ensure that every child gets the best start in life. We are overhauling jobcentres and reforming the broken welfare system to support people into good, secure jobs, while always protecting those who need it most.

In addition to extending free school meals and ensuring the poorest children don’t go hungry in the holidays through a new £1bn crisis support package, our child poverty taskforce will publish an ambitious strategy to tackle the structural and root causes of child poverty across the country.

However, as the Canary has documented, Labour’s rhetoric around the Department for Work and Pensions (DWP) masks the reality: that it has cut chronically ill and disabled people’s benefits – and, as we only just reported, it seems it is planning to go even further with that. This alone will plunge more kids into poverty – on top of the two-child benefit cap.

Interconnected issues

Even beyond the two‑child benefit cap, the interconnected overall benefit cap continues to deny meaningful support to families already reeling from soaring living costs. Removing one restriction without addressing the other leaves 100,000 children still vulnerable, according to earlier government estimates. 

The government’s own numbers only underscore the urgency: parliament’s research estimates that abolishing both the benefit cap and the two‑child benefit cap could reduce child poverty by around 620,000, at an annual per‑child cost of about £5,400—a price far outweighed by the potential long-term social and economic gains.

Meanwhile, the broader context is grim. In the financial year ending 2024, 2.72 million children across the UK—22% of kids aged 0–15—lived in relative low‑income families, a rise from prior years. The striking contrast between the scale of the problem and the government’s lack of bold action is inexcusable.

Labour’s hesitation on this vital issue not only betrays its own rhetoric of fairness and progress but opens a moral and political vacuum. If the Party cannot lead on dismantling deeply damaging welfare constraints—especially ones that target children—what can it realistically promise?

Let there be no more excuses. The two-child benefit cap must go. Children’s futures should not be collateral damage to fiscal incompetence. True leadership would scrap this cruel policy now.

Featured image via the Canary