Displaying items by tag: two child cap

Rachel Reeves has delivered her second Budget against a backdrop of weak economic growth, high inflation and tightening household finances. Seeking to raise revenue without triggering an inflation spike, she avoided the previously signalled rise in income tax rates and instead relied on a wide mix of indirect tax changes and frozen thresholds. Measures include new or higher taxes on wealth, property, tourism, gambling and high-sugar drinks, along with a future per-mile charge for electric vehicles. A major welfare change will see the two-child benefit cap scrapped in April 2026, while benefits rise in line with inflation. Business incentives are also adjusted, including changes to capital allowances and dividend taxation. She has also raised the basic living wage significantly: see https://www.bbc.co.uk/news/articles/cn41v89xq4go Critics warn the strategy adds complexity and prolongs record-high tax levels, raising concerns that further tax rises may still be needed. Reeves positioned the Budget as a necessary step to stabilise public finances while supporting workers and the most vulnerable during economic uncertainty.

Keir Starmer has given his clearest indication yet that his government intends to scrap the two-child benefit cap, strongly suggesting the change will be included in the forthcoming 26 November Budget. He said he would not promise to drive down child poverty without being prepared to take 'a number of measures' to achieve it. His comments closely followed remarks from Rachel Reeves, who said it was wrong for children to be 'penalised' simply for being part of a larger family. Treasury sources described her comments as a deliberate 'signal of intent’, with ministers reportedly favouring a full removal of the cap rather than more limited alternatives. One estimate is that abolishing the cap would cost around £3.5bn by 2029/30. The move comes amid unease within Labour ranks over the party’s commitment not to raise income tax. Starmer insisted he was 'personally committed' to reducing child poverty, saying it was a defining achievement of the last Labour government and a priority he intends to pursue again. See

Rachel Reeves is expected to announce changes to the two-child benefit cap in November’s Budget, amid growing pressure to scrap the policy introduced by George Osborne under Conservative austerity measures. The cap currently limits child benefit payments to the first two children in a family, affecting 1.6 million children. Campaigners argue its removal would be the single most effective step in reducing child poverty. She has convened a government taskforce on child poverty and signalled she will act on its recommendations, though she stresses financial constraints must be considered. Options include abolishing the cap outright or introducing a tapered system, potentially limiting payments for larger families or linking them to working parents on universal credit. Keir Starmer has already pledged extended free school meals as part of efforts to end child poverty, saying 'a Britain where no child is hungry' is central to Labour’s vision. Critics warn of significant cost implications, while supporters say families cannot wait for relief.