Outgoing Chancellor Rachel Reeves has announced bonus payments for Universal Credit households, scrapping the two-child benefit cap in a move she says will help "lift kids out of poverty." The policy change, part of Labour's agenda, will increase benefit payments for larger families, with households of three children receiving an extra £304 per month and those with four children getting £608.
Details of the Policy Change
Previously, under the Conservative government, families could only claim benefits for two children. The new Labour government has removed this cap, allowing families to claim for all children. The change is expected to benefit millions of claimants, though it comes at a significant cost to the government. Reeves defended the decision, stating it is a crucial step in improving life chances for children.
Reeves Reflects on Her Tenure
Speaking to the BBC, Reeves reflected on her time as Chancellor, acknowledging that some choices might have been different. However, she emphasized the broader strategy: "return stability to the economy, to enable interest rates to come down." She highlighted that the UK is "growing for the first time and seeing productivity growth in our economy at rates we haven’t seen for a long while."
Criticism and Support
The move has drawn criticism from opponents who argue Labour is spending too much on benefits. But Reeves remains proud of the achievement as she prepares to leave her role following Keir Starmer's resignation. She said, "Look at the big picture, look at the plan, look at the strategy that I have been pursuing."
Impact on Families
For families with three children, the extra £304 per month could significantly ease financial pressures. For those with four children, the £608 increase is even more substantial. The policy is part of a broader Labour effort to address child poverty, though it remains a divisive issue in UK politics.
