Overview
- The prime minister said he is determined to reduce child poverty and the chancellor said children should not be penalised for larger families, strongly indicating the cap will be lifted in the Budget.
- Rachel Reeves warned sticking to Labour’s tax pledge would mean deep cuts to capital investment and said she will set out the choices on 26 November.
- The Institute for Fiscal Studies estimates reversing the cap would cost about £3.6bn and could lift roughly 630,000 children out of poverty.
- Campaigners and analysts caution that many families may see reduced or no gains because of the household benefit cap, which sources say is not currently slated for change.
- Treasury officials had explored partial options such as a higher child limit or a taper, but the latest public signals from No 10 and the Treasury lead suggest a move toward full abolition under intense pressure from within Labour and anti-poverty groups.