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Plan to scrap two-child benefit cap ‘dead’ after welfare retreat

  • Labour has decided to maintain the two-child limit on means-tested benefits that was introduced in April 2017, despite calls from some party members to remove the restriction.
  • Plans to remove the cap are now considered dead after Labour’s £5 billion welfare U-turn and internal party divisions.
  • The cap affects around 450,000 families and costs struggling households an average of £4,300 each per year, according to official figures.
  • A No 10 source said the plan is "now dead in the water," while a Treasury source warned MPs there must be trade-offs for not approving welfare reforms.
  • This decision delays £5 billion in welfare savings, increases pressure on Chancellor Rachel Reeves before the autumn Budget, and risks unrest among Labour backbenchers.
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Ministers ‘pushed ahead too fast’ on welfare reform, says Phillipson

The Government warned there would be financial consequences to the decision not to reform personal independence payment as planned.

·London, United Kingdom
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Bias Distribution

  • 39% of the sources lean Left, 39% of the sources are Center
39% Center
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The Times broke the news in United Kingdom on Saturday, July 5, 2025.
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