Chancellor scraps two-child benefit cap in bid to tackle child poverty

The announcement sparked loud cheers from government benches.

Before revealing the move, Ms Reeves highlighted in her speech the “triple cost” to society of children growing up in poverty, including the impact of growing up in temporary accommodation.

She said: “The first and the heaviest [cost] is to the child going to school hungry, waking up in a cold home or in another B&B, while other children enjoy the advantages of parents with time to help with homework, the quiet space at home to work in. Too many go without.

“And there is also the cost of supporting a family in poverty, which ends up in the lap of overstretched councils who can do no more than shunt them into temporary accommodation at huge cost to local taxpayers.

“Then there is the future cost to our economy and to our society of wasted talent and a welfare system that bears the cost of failure for decades to come.” 

Scrapping the two-child benefit cap was one of the key asks from the housing sector ahead of the Budget. 

The cap policy was brought in by the Conservative government eight years ago. It meant that families could not claim benefits for their third or subsequent children born after April 2017.

This year, the Institute for Fiscal Studies estimated that families affected by the cap could have received around £4,400 in benefits per year if the policy had not been introduced.