Overview
- Chancellor Rachel Reeves told BBC Radio 5 Live that children should not be penalised for being in larger families and promised action on child poverty in the 26 November Budget.
- Prime Minister Keir Starmer said the government will announce measures soon to drive child poverty down, hinting the cap could be lifted.
- Officials are weighing designs that range from full abolition to partial changes such as raising the limit to three or four children or introducing a taper.
- The Institute for Fiscal Studies and other analysts estimate ending the cap would cost about £2.8–£3.6bn annually and could lift hundreds of thousands of children out of poverty.
- Reeves signalled that keeping Labour’s tax pledges would require deep investment cuts, and external analysis suggests an income tax rise is likely to help fund welfare changes.