Scotland’s promise to abolish two-child benefit cap expected to reduce child poverty by 2029

Scotland has promised to scrap the two-child limit on benefits from 2026.

Scotland is the only country where child poverty rates are expected to fall by 2029, according to the Joseph Rowntree Foundation’s (JRF) annual poverty report.  

Scotland has promised to scrap the two-child limit on benefits from 2026, which will boost the income of larger families on low incomes. There is already the Scottish child payment in place, providing families who receive certain benefits and have children under the age of 16, with a weekly top-up of £25.

As a result of these measures, child poverty in Scotland is currently 7 percent lower than the rest of the UK, and it is projected to be 10 percent lower by 2029. At that point, while almost one in three children in England are expected to still be living in poverty, in Scotland the figure is expected to be closer to one in five.

Official figures from Child Poverty Action Group from July 2024, showed that 1 in 9 children (1.6 million) are affected by the two-child limit.  The JRF report warns that unless the UK government makes substantial investments in social welfare, progress on reducing child poverty will be minimal.

The anti-poverty charity warns that while a strong economy may lead to higher employment and wages, it won’t reduce poverty alone.

It is estimated that lifting the two-child limit which restricts parents from claiming means-tested benefits like Universal Credit for more than two children, would lift hundreds of thousands of children out of poverty.  

The cap was introduced by the Conservative government in 2017 as part of austerity measures under David Cameron and George Osborne and has been kept in place by Labour.

The policy has been criticised for disproportionately affecting large families. Children in large families with two or more siblings are more likely to live in poverty, with 45% of them affected compared to 30% of all children. Similarly, children in lone-parent families face a higher risk of poverty, with 44% living in poverty.

According to the End Child Poverty Coalition, scrapping the two-child cap would lift around 250,000 children across the UK out of poverty.

In July, Labour suspended seven MPs for six months after they voted against the government on an amendment to abolish the two-child benefit cap. Former shadow chancellor John McDonnell, Richard Burgon, Ian Byrne, Rebecca Long-Bailey, Imran Hussain, Apsana Begum, and Zarah Sultana, voted for an SNP motion calling for an end to the policy

Paul Kissack, chief executive of the JRF, described growing levels of poverty and insecurity as acting as a tightening brake on growth and opportunity.

“We can’t expect children to be ready for school or able to learn if they’re going without the basics.

“Growing up in poverty can also lead to poor health, increasing pressure on the NHS. Child poverty will only be driven down through focused, deliberate and determined policy action. Even very strong economic growth won’t automatically change the picture.”

Labour is expected to release its cross-government child poverty strategy this year, promising to address the “systemic drivers” of poverty, such as housing and employment.

A government spokesperson said: “No child should be in poverty – that’s why our ministerial taskforce is exploring all levers available across government to give children across the UK the best start in life, while our plan for change will raise living standards across the country.  

“As we fix the foundations of the economy, we’re increasing the living wage, uprating benefits and supporting 700,000 of the poorest families with children by introducing a fair repayment rate on universal credit deductions to help low-income families and make everyone better off.”