Overview

• Prime Minister Sir Keir Starmer and Education Secretary Bridget Phillipson have confirmed that removing the cap is under active review as part of the government’s child poverty strategy.
• The cap, introduced by a Conservative government in 2017, restricts Universal Credit and child tax credit entitlements to two children born after April 2017.
• Child Poverty Action Group analysis indicates that lifting the cap would move 350,000 children out of poverty and reduce severity for another 700,000.
• Think tank estimates for scrapping the cap range from £2 billion to £3.5 billion annually, prompting ministers to consider tax increases or spending shifts to cover costs.
• Conservative leader Kemi Badenoch says ending the cap would be unfair to taxpayers and fiscally irresponsible, while Reform UK’s Nigel Farage has pledged to abolish it completely if in power.