The government’s abrupt U-turn on welfare reforms has significantly complicated spending decisions. Education Secretary Bridget Phillipson acknowledged this on Sunday as she declined to commit to scrapping the controversial two child benefit cap.
Phillipson said ministers were examining “every lever” to reduce child poverty. However, she stressed that removing the cap, which restricts benefits for larger families, would “come at a cost.” Her remarks follow a Labour backbench rebellion that forced the government to abandon £5bn in planned welfare savings. This has strained Chancellor Rachel Reeves’ budget plans.
The two-child policy currently affects 1.6 million children. Scrapping it could cost £3.4bn annually while lifting 500,000 children from poverty, according to the Institute for Fiscal Studies. Phillipson emphasized the need to balance social goals with fiscal responsibility. She noted the government is expanding free school meals, childcare, and family hubs as alternative anti-poverty measures.
Labour MPs, including prominent rebels like Jon Trickett, argue that retaining the cap contradicts the party’s poverty-reduction pledges. Trickett called it “truly shocking” to leave children in poverty after retreating on disability benefit cuts. Meanwhile, Chancellor Reeves has refused to rule out tax hikes to offset the welfare U-turn’s financial impact. She stated she is “not wedded to any specific policy.”
Opposition MPs seized on the turmoil, with Shadow Chancellor Mel Stride advocating stricter limits on mental health-related disability benefits. The Tories claim such reforms could save £7.4bn by 2030, calling current welfare spending “unsustainable.”
With Labour’s child poverty taskforce due to report this autumn, Phillipson’s noncommittal stance signals tough negotiations ahead. It underscores how the welfare reversal has reshaped the government’s fiscal and political landscape.
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