2 CHILD BENEFITS CAP TO FINALLY BE SCRAPPED

As of February 2026, the Labour government has finally committed to scrapping the two-child benefit cap — a welcome but long-overdue decision that the Liberal Democrats called for in our 2024 General Election Manifesto.

The cap, brought in under the Conservatives, has spent nearly a decade pushing hundreds of thousands of children into poverty. While Labour hesitated — and even suspended seven of its own MPs in 2024 for voting against maintaining the cap — the Liberal Democrats continued pressing for a vote to end it describing it as a cruel and arbitrary limit that punishes children for the circumstances of their birth..

Now, at last, Labour has confirmed it will scrap the two-child limit within Universal Credit from April 2026. The move is expected to cost £2.3 billion in 2026–27, rising to £3 billion by 2029–30, according to the Office for Budget Responsibility. Crucially, it is projected to lift 450,000 children out of poverty over that period — a powerful reminder of why this policy should never have been left in place for so long.

This reversal represents a significant U-Turn for Labour, which had previously defended retaining the cap on cost grounds. Liberal Democrats have long argued that investing in children is not just a moral imperative but an economic one, reducing long-term social costs, strengthening communities and developing an economically active and innovative workforce.

Meanwhile, Reform UK has executed a U-turn of its own, now pledging to restore the cap in full if it were to win power, claiming the country cannot afford to lift it. For many campaigners, that stance risks dragging the country back toward policies that deepen hardship rather than address its root causes.

Charities including Unicef UK and the Trussell Trust have welcomed Labour’s decision, highlighting the transformative impact it could have on families struggling with the cost-of-living crisis. While concerns over public finances remain part of the debate, the growing consensus among anti-poverty organisations is clear: the human cost of the cap far outweighs its fiscal savings.

The scrapping of the two-child benefit cap is undoubtedly a victory for campaigners and for the Liberal Democrats’ sustained pressure, but it also raises an unavoidable question: how many children were forced into poverty while Labour delayed taking the necessary step?