Latest news with #twoChildBenefitCap
Sky News
27-05-2025
- Business
- Sky News
What is the two-child benefit cap and will Labour scrap it?
The government is considering getting rid of the two-child benefit cap first brought in by the Conservatives. The policy has caused considerable consternation within the Labour Party, with a growing number of MPs calling to scrap it and ministers so far refusing to. But now, Education Secretary Bridget Phillipson has given the government's strongest hint yet it may scrap the cap after she told Sky News ministers are "considering" lifting it. We look at what the cap is and the controversy over it. What is the two-child benefit cap? Since 2017, parents have only been able to claim child tax credit and universal credit for their first two children, if they were born after April 2017. An exception is made for children born as a result of rape. 0:56 Who introduced it? Then work and pensions secretary Iain Duncan Smith first proposed the policy in 2012 under the Conservative-Liberal Democrat coalition government. It was not until 2015 that then chancellor George Osborne announced a cap would be introduced from the 2017/2018 financial year. The coalition said it made the system fairer for taxpayers and ensured households on benefits faced the same financial choices around having children as those not on benefits. What is Labour's position on the cap? The party has long been divided over the issue, with Sir Keir Starmer ruling out scrapping the cap in 2023. He then said Labour wanted to remove it, but only when fiscal conditions allowed. Following Labour's landslide victory last July, the prime minister refused to bow to pressure within his party, and suspended seven MPs for six months for voting with the SNP to scrap the cap. Ministers have toed the party line for months, but the narrative started to shift in May, with Sir Keir reported to have asked the Treasury to see how scrapping it could be funded. The publication of Labour's child poverty strategy was delayed from the spring to autumn, fuelling speculation the government wants to use the next budget to scrap the cap. Then the education secretary told Sky News on 27 May lifting the cap is "not off the table" - and "it's certainly something that we're considering". 2:37 How many children does the cap affect? Government figures show one in nine children (1.6m) are impacted by the two-child limit. In the first three months Labour were in power, 10,000 children were pulled into poverty by the cap, the Child Poverty Action Group found. In May, it said another 109 children are pulled into poverty each day by the limit, adding to the 4.5 million already in poverty. The Resolution Foundation said the cap would increase the number of children in poverty to 4.8 million by the next election in 2029-30. Torsten Bell, the foundation's former chief executive and now a Labour Treasury minister, said scrapping the cap would lift 470,000 children out of poverty. How much would lifting the cap cost the taxpayer? The cap means for every subsequent child after the first two, families cannot claim benefits worth £3,455 a year, according to the Institute for Government. It estimates removing the limit would cost the government about £3.4bn a year - equal to roughly 3% of the total working-age benefit budget. It is also approximately the same cost as freezing fuel duties for the next parliament.
BBC News
25-05-2025
- Politics
- BBC News
Newscast Will Starmer Scrap the Two-Child Benefit Cap?
Today we look at whether the government is about to row back on another policy - the two-child benefit cap. It prevents parents from claiming universal credit or child tax credit for a third child, with a few exemptions. Speaking to Laura this morning, the Deputy Prime Minister Angela Rayner refused to confirm whether it was going to be scrapped. Rayner also responded to a story in The Telegraph this week, after the paper got hold of a document that suggests she's is at odds with the chancellor over economic policy. And Laura, Paddy and Henry discuss how safe Kemi Badenoch is as leader of the opposition. You can now listen to Newscast on a smart speaker. If you want to listen, just say "Ask BBC Sounds to play Newscast'. It works on most smart speakers. You can join our Newscast online community here: New episodes released every day. If you're in the UK, for more News and Current Affairs podcasts from the BBC, listen on BBC Sounds: Newscast brings you daily analysis of the latest political news stories from the BBC. It was presented by Laura Kuenssberg and Paddy O'Connell. It was made by Chris Flynn with Rufus Gray. The technical producer was Phil Bull. The weekend series producer is Chris Flynn. The assistant editor is Chris Gray. The editor is Sam Bonham.
Telegraph
24-05-2025
- Business
- Telegraph
Farage outflanks Starmer on benefits
Nigel Farage will this week outflank Sir Keir Starmer by committing to scrapping the two-child benefit cap and fully reinstating the winter fuel payment. The Reform leader will appeal to Left-leaning voters in a challenge to Sir Keir in a speech launching his biggest attack yet on the Prime Minister. His intervention is likely to spark a fresh wave of demands from Labour rebels for Downing Street to speed up planned policy shifts on both fronts. Sir Keir is open to scrapping the two-child benefit cap but Rachel Reeves, the Chancellor, is understood to be resisting an immediate announcement until she can set out how it would be funded. Removing the cap entirely, combined with reinstating winter fuel payments for some pensioners as announced last week, would cost the Treasury as much as £5 billion, making tax rises more likely. Mr Farage will use his first address since Reform's local elections triumph to warn the Prime Minister that traditional Labour voters are turning to his party. He is expected to say: 'Starmer is one of the most unpatriotic prime ministers in our history and this past week has been evidence of that. 'The Prime Minister is out of touch with working people, he doesn't understand what they want and how they feel about the big issues facing Britain. 'It's going to be these very same working people that will vote Reform at the next election and kick Labour out of government.' The Reform leader will commit to ending the two-child cap, which was introduced by the Conservatives in 2017 to cut the benefits bill. A Reform source said: 'We're against the two-child cap and we'd go further on winter fuel by bringing the payment back for everyone. 'That's already outflanking Labour.' Zia Yusuf, Reform's chairman, has said the party would pay for policies like the reinstatement of the winter fuel payment by cutting the foreign aid budget, closing asylum hotels and ending net zero subsidies. The two child-benefit cap blocks parents from claiming Universal Credit or child tax credit for more than two children and has been blamed for driving a rise in poverty. Mr Farage has previously spoken about how both the welfare and taxation systems should be used to encourage families to have more children. Sir Keir is under growing pressure to abolish the two-child benefit cap to appease as many as 150 Labour rebels who are threatening to vote down separate cuts to disability benefits. He backs ending the limit, but is said to be facing pushback from Morgan McSweeney, his chief of staff, and Ms Reeves, who are wary of the £3.5 billion cost. The two-child benefit cap will now be either watered down or abolished, it is understood, but an announcement on the final course of action has been delayed until the autumn budget. That will give the Chancellor enough time to work out how the change will be paid for, with a widespread expectation that she will have to raise taxes. But the delay has angered some Labour MPs, who have demanded No 10 take action now. Dame Meg Hillier, the Labour chairman of the Commons treasury committee, said lifting the cap was 'the only way we'll lift children out of poverty in this Parliament'. Sir Keir placated some rebels earlier this week by announcing that he would perform a partial about-turn on the winter fuel allowance. The Prime Minister said he would change the rules so that 'more pensioners' would qualify after the policy was blamed for Labour's local elections defeat. But he will now come under pressure to match Mr Farage's pledge to fully reinstate the payment to all pensioners, at a cost of about £1.4 billion a year. Reform 'on course to win next election' In his speech, Mr Farage is set to launch a wide-ranging attack on Sir Keir covering immigration, the Chagos Islands deal and his EU reset. He is expected to say: 'Immigration is still at a historical high and Labour don't have the want or political will to do what needs to be done to bring it down to net zero, which is what the majority of the British public want.' He will be flanked by Reform's new council leaders, mayors and its latest MP, Sarah Pochin, who won her Runcorn seat in a by-election victory over Labour. The speech is designed to send a message that the party is on course to win the next election and that backing it is not a wasted vote. Mr Farage's previous parties, the UK Independence Party and the Brexit Party, failed to make the transition from protest votes to frontrunners in general elections. Reform officials are confident that the local elections, when the party took control of 10 councils, represented a 'coming of age moment' where voters viewed it as a realistic party of government. The party has led in the national opinion polls since the middle of April and was seven points ahead of Labour in the most recent YouGov survey. Sir Keir has been seen to be tacking to the Right, particularly on immigration, to try to see off Reform's threat, with Ms Pochin saying that Labour was 'sounding more like Reform than Reform are'.
