Government delays child poverty strategy as speculation grows over potential benefit reforms and fiscal priorities
Deputy Prime Minister Angela Rayner has sidestepped growing speculation that the government may be preparing to scrap the controversial two-child benefit cap, a welfare policy that has become a central focus in the national debate on poverty and social justice.
The cap, which was introduced in April 2017 under the Conservatives, prevents most families from claiming means-tested benefits for a third or subsequent child, unless specific exemptions apply. Critics argue the policy penalises large low-income families and exacerbates child poverty.
Reports from The Observer suggest that Prime Minister Sir Keir Starmer has privately expressed support for abolishing the cap and has even asked the Treasury to examine the £3.5 billion cost of ending the policy. However, the government has not confirmed any official position.
Rayner Non-Committal on Benefit Cap Reform
When asked on Sunday with Laura Kuenssberg whether she supports ending the cap, Rayner was careful not to commit.
“I’m not going to speculate on what our government is going to do,” she said, instead pointing to the work of the newly established Child Poverty Taskforce, which is reviewing a range of options, including welfare reforms and increased housebuilding.
Rayner acknowledged the cap was “one element” under consideration, while also noting the broader economic challenges facing the country.
Labour has consistently framed its fiscal strategy around “discipline and delivery,” with Starmer and Chancellor Rachel Reeves stressing that any new spending must be fully costed. This may explain the government’s hesitation to promise sweeping welfare reforms ahead of the autumn Budget, where any formal announcements are expected.
Internal Divisions and Leaked Memo Fuel Tensions
The conversation was further complicated by a leaked memo from Rayner’s department, published by The Daily Telegraph, which appeared to suggest clawing back child benefit from higher-income families as a way to fund other anti-poverty measures. Rayner distanced herself from the leak, stating emphatically: “I do not leak. Leaks are very damaging, and I categorically deny any involvement.”
Speculation quickly mounted that the leak was a political maneuver, with some suggesting Rayner was attempting to position herself as an alternative to Starmer. She dismissed the claim outright: “I do not want to run for leader of the Labour Party. I rule it out. Being Deputy Prime Minister is the honour of my life.”
She also insisted that Labour’s Cabinet remains unified: “I can reassure you the government is solid.”
Wider Welfare Policy Under Scrutiny
The debate comes on the heels of another U-turn by the Starmer government—this time on winter fuel payments. Ministers announced they would reverse cuts to the allowance, which saw more than 10 million pensioners lose out on top-up payments worth up to £300 per year when eligibility was restricted to recipients of pension credit.
Rayner confirmed the policy will be restored in the autumn Budget, though she stopped short of guaranteeing that the change would come into effect before this winter, deferring instead to Reeves’ upcoming fiscal statement.
Opposition Reactions: From Populism to Fiscal Frugality
Reform UK leader Nigel Farage took the opportunity to call for the full reinstatement of winter fuel payments and the immediate abolition of the two-child benefit cap, arguing that these measures are essential to support working-class families.
Rayner brushed off his comments: “Farage says a lot of things.”
Her dismissal was echoed by Conservative leader Kemi Badenoch, who described Farage’s pledges as “nonsense,” accusing political rivals of making empty promises without regard for budgetary constraints. “The public is sick and tired of politicians making promises they cannot keep,” she said.
However, Badenoch herself appeared to contradict that line when she urged the government to fully restore winter fuel payments, suggesting the Tories are also feeling the heat on cost-of-living issues.
Balancing Compassion with Credibility
Labour’s cautious approach reflects a difficult balancing act. On the one hand, abolishing the two-child benefit cap would lift an estimated 250,000 children out of poverty, according to research from the Child Poverty Action Group. On the other, the £3.5 billion price tag raises concerns about affordability in a tight fiscal environment.
Rayner’s non-committal stance may be a strategic move to keep the door open while maintaining economic credibility, a key plank of Labour’s electoral strategy.
Yet, with rising public concern over inequality, stagnant wages, and the cost of living, the pressure on the government to deliver a bold, compassionate child poverty strategy is mounting. If Labour’s autumn Budget does not deliver meaningful reforms, it risks criticism from both its progressive base and a growing chorus of experts calling for targeted welfare support.
