Overview
- The prime minister and chancellor have given their clearest hints that the two-child limit will be lifted or altered in the Budget, framing the move as part of a drive to cut child poverty.
- Rachel Reeves has said sticking to Labour’s no-rise pledge on income tax, VAT and national insurance would require “deep cuts” to investment, signaling she may consider higher taxes instead.
- Treasury options reported by multiple outlets include full abolition, raising the limit to three or four children, or introducing a taper that reduces support for later-born children.
- Independent estimates suggest ending the policy would cost roughly £2bn to £3.6bn a year and could lift hundreds of thousands of children out of poverty, with about 1.6 million currently affected.
- The IFS warns gains could be reduced for some families because of the separate overall benefit cap, while political pressure from Labour backbenchers and figures such as Gordon Brown is shaping the decision.