Labour is reportedly contemplating the removal of the two-child benefit limit. This cap, implemented in April 2017 by the Conservative party, restricts Universal Credit and Child Tax Credit to the first two children in most households. Critics argue that this limitation exacerbates poverty by withholding assistance from struggling families.

According to data from the Department for Work and Pensions (DWP), nearly 1.7 million children across 469,780 households are affected by the two-child limit.

There has been no official announcement from Labour regarding any changes to the benefit system. If alterations were to occur, they might be disclosed during the Autumn Budget on November 26.

Government sources have emphasized that no definitive decisions have been made. Reports suggest that the two-child benefit limit could be replaced with a new system where parents receive reduced benefits for each additional child.

Options being considered include limiting additional benefits to three or four children or lifting the cap for working parents on Universal Credit exclusively. Chancellor Rachel Reeves has been cautioned by Treasury officials that completely scrapping the two-child benefit cap could incur a cost of around £3.5 billion.

When asked about lifting the cap at the Budget, Reeves stated during the Labour conference that policies to reduce child poverty would be outlined in the Budget, emphasizing the importance of clarifying funding sources.

The Prime Minister expressed determination to combat child poverty, highlighting its significance both as government policy and on a personal level.