Chancellor Rachel Reeves has made an announcement to eliminate the two-child benefit restriction, a decision that is expected to lift hundreds of thousands of children out of poverty. This move, greeted with enthusiasm by Labour MPs, was revealed during the Budget session today, marking the end of a policy introduced by George Osborne in 2017. The policy limited child tax credits and universal credit to the first two children in a family and has been widely criticized for exacerbating child poverty.

During her Budget speech, Chancellor Reeves emphasized that penalizing the most vulnerable children is not the solution to fixing a flawed welfare system. She described the two-child cap as a policy that disproportionately pushes children into poverty and declared it a failure. Reeves expressed empathy for families facing hardships and stressed that children should not suffer the consequences of difficult circumstances such as bereavement, separation, illness, or unemployment within a family.

In addition to abolishing the two-child limit, Reeves confirmed the removal of the controversial “rape clause,” which required women to seek an exemption for a child conceived through non-consensual means. Asserting her stance against such dehumanizing practices, Reeves vowed to eradicate the clause from legislation, labeling it as cruel and inhumane.

The decision to scrap the policy is part of a broader effort to combat fraud and error in the welfare system, crackdown on tax avoidance, and reform gambling taxation. Reeves announced that the removal of the two-child limit will be fully funded and implemented from April onwards, with estimates suggesting an expenditure of £3 billion by 2029-2030 but a projected reduction of 450,000 children in poverty.

Labour MPs, along with former Prime Minister Gordon Brown, a vocal advocate against child poverty, have long campaigned for the abolition of this policy. The issue had caused significant rifts within the Labour party before the general election, leading to the expulsion of seven Labour MPs last summer. The government is set to release a comprehensive child poverty strategy in the near future.

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