Rachel Reeves must seize the opportunity to finally scrap the two-child benefit cap

Next week (11 June) chancellor Rachel Reeves will set out Labour’s first comprehensive spending review for 17 years. A multi-year settlement for Whitehall departments is an enormous challenge at the best of times. In difficult economic times, it’s even harder. Global uncertainty, increased conflict and the decline in UK living standards make for a chilling backdrop against which to set out one’s economic stall and deliver manifesto promises.

The Treasury will be aware of the avalanche of statistics that show child poverty is rising in the UK. Department for Work and Pensions (DWP) figures show ministers have inherited record levels of child poverty, now at 4.5 million children.

The two-child limit on universal credit and child tax credits puts one child into poverty every 13 minutes. Around one million children are experiencing destitution. Public health evidence shows that child poverty causes worsening physical and mental health among children and risks lower adult productivity.

Read more:

• I’m buying fruit and veg for my kids on ‘buy now, pay later’. The two-child benefit cap needs to go
• All children on universal credit to get free school meals: ‘It will take hunger out of the classroom’
• Brits seem apathetic towards Labour’s disability benefit cuts. Where has all the empathy gone?

It is excellent news that after years of campaigning, all children in homes where families claim universal credit will get free school meals from 2026. A free nutritious lunch helps children learn and lightens the load for parents when they’re budgeting for other essentials. But there is still more to do.  

At Save the Children we speak to families across the UK every week who tell us the same thing and ask for the same changes. First, that universal credit is not providing them with an adequate safety net and needs reform. And second, the two-child limit to benefits forces a life of struggle and difficulty and must be scrapped. Welfare has barely covered the cost of essentials in the past 14 years. When it did – in just two of those years – it was because of the £20 per week uplift to universal credit during the Covid-19 pandemic. The poorest households in Slovenia and Malta are better off than the poorest in the UK, according to the National Institute of Economic and Social Research.

Millions of children and their families are facing great challenges now that cannot be solved by free school meals expansion alone. They shouldn’t have to wait for the autumn to see action when the government promises to publish its delayed child poverty strategy. Instead, the government should use the opportunity of the comprehensive spending review on 11 June to set out how its spending plans for the next three years will deliver further material change. They should choose to put tackling child poverty at the heart of their plans with a firm commitment to scrap the two-child limit and benefit cap.

Past crises such as the Covid-19 pandemic saw the previous government take action on that made a real difference to people’s lives. If this was possible then, why not now when action could have an immediate and life-changing impact on millions of children living in poverty?

Measures announced at the spending review are being described by Labour as a “downpayment” on driving down child poverty, but we remain resolute that anything other than scrapping the two child limit and benefits cap is just tinkering at the edges of meaningful change. 

Indeed, if the chancellor is ambitious, she should go further and introduce a ‘child lock’. Under this, universal credit and other related child benefits – including child benefit which goes to around 93% of all families – would rise in future in line with average earnings or wages, whichever of the two figures is higher. This ‘child lock’ loosely mirrors the pensions triple lock which has helped keep pensioners out of poverty and is popular across the political spectrum. 

It would cost £6 billion per year by 2034/35 to introduce a child lock, scrap the two-child limit and benefit cap – around half the cost of the pensions triple lock. Meanwhile, the cost of child poverty to the UK government sits now at £39bn a year. In short, tackling child poverty is an investment in the future of our country.

The prime minister has said it is his “moral mission” to reduce poverty. With acknowledgement across the political spectrum that child poverty rates are now a major problem and the emerging political consensus that child poverty rates must come down, it’s time for the chancellor to think big.

The Comprehensive Spending Review shouldn’t just be a staging post but a key moment for the government to put into action policies that will raise living standards for families and demonstrate their commitment to reduce child poverty.

Promises are easy to break. Sign Big Issue’s petition for a Poverty Zero law and help us make tackling poverty a legal requirement, not just a policy priority.

Do you have a story to tell or opinions to share about this? Get in touch and tell us more. Big Issue exists to give homeless and marginalised people the opportunity to earn an income. To support our work buy a copy of the magazine or get the app from the App Store or Google Play.