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Labour Rethinks Two-Child Benefit Cap and Partially Reinstates Winter Fuel Payments

Reform UK’s challenge has intensified pressure on Keir Starmer’s fiscal agenda; ministers have pushed definitive welfare changes into an autumn child poverty plan.

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Overview

  • On May 27, Nigel Farage pledged in London to scrap the two-child benefit cap, fully restore winter fuel payments and introduce a transferable marriage tax allowance to woo working-class voters.
  • Education Secretary Bridget Phillipson said that removing the two-child cap is “certainly something we are considering,” marking the strongest government signal yet.
  • Ministers have announced a partial U-turn on winter fuel payments by restoring the allowance for all but the wealthiest pensioners.
  • The government has delayed its child poverty strategy until autumn, when it plans to set out definitive welfare reforms including the fate of the two-child cap.
  • Independent experts and the Institute for Fiscal Studies caution that fully reversing the cap and fuel cuts could add roughly £5 billion to borrowing and strain existing fiscal rules.