Rachel Reeves has come under fire from child poverty campaigners for keeping the two-child benefit cap in place following her first major spending review. While the new budget promises increased investment in schools and childcare, critics argue that failing to address this key welfare policy contradicts the government’s commitment to social fairness and tackling child poverty.

Spending Review Unveils Major Education Investment

On Wednesday, 11 June, Chancellor Rachel Reeves delivered a landmark spending review that outlines the Labour government’s fiscal priorities. Framed as a “blueprint for national renewal,” the review promises substantial funding boosts for the education sector. Among the most notable pledges are:

• £2.4 billion to construct new school buildings across the UK

• £2.3 billion annually to maintain and upgrade existing educational infrastructure

• £370 million earmarked specifically for school-based nurseries, aimed at supporting early years education

These investments, according to Reeves, form a central pillar of Labour’s vision for “breaking down barriers to opportunity” and creating a more equitable society.

Child Poverty Advocates Disappointed by Inaction on Welfare Reform

Despite these positive steps, many charities and welfare organisations have criticised the government for refusing to scrap the controversial two-child benefit cap. Introduced in 2017 under austerity measures, the cap limits child-related benefits to the first two children in most households, regardless of family circumstances.

Charities argue that the policy has disproportionately impacted low-income families, plunging hundreds of thousands of children deeper into poverty. According to the Child Poverty Action Group (CPAG), lifting the cap would be one of the single most effective ways to reduce child poverty in the UK.

Alison Garnham, chief executive of CPAG, said:
“The two-child limit is a cruel policy that pushes families with children into hardship. If the government is truly serious about giving every child a fair start in life, this is the first policy that needs to go.”

A Policy at Odds with Promises of Fairness

The contradiction between Labour’s stated goals and its policy actions has not gone unnoticed. Rachel Reeves has framed her economic strategy around fairness and opportunity, but the decision to retain the benefit cap appears to undermine those aspirations.

Critics have pointed out that while investments in education are welcome, they cannot substitute for direct financial support to families struggling to afford basic necessities. For many low-income households, especially those with more than two children, the cap effectively creates a ceiling on opportunity.

“You can’t educate your way out of hunger,” said a spokesperson from Save the Children. “Children need both quality education and economic security at home to thrive.”

Calls for Policy Coherence Grow Louder

Numerous MPs, social policy experts, and grassroots campaigners have called on the government to reassess its position. They argue that lifting the cap would be a bold and relatively straightforward step toward reducing economic inequality.

Recent data suggests that more than 1.5 million children are affected by the cap, with disproportionate impacts on ethnic minority communities and single-parent households. A growing body of research links the policy directly to increased reliance on food banks, poor child health outcomes, and lower educational attainment.

MPs across party lines have urged the chancellor to listen to the evidence and to affected families. Labour MP Zarah Sultana tweeted, “The two-child benefit cap is not just unjust — it’s ineffective and economically short-sighted. Time to scrap it.”

What the Government Says

Despite mounting pressure, government officials have defended the policy, suggesting that its removal is not currently fiscally viable. According to estimates, abolishing the cap would cost around £1.3 billion annually — a significant but not insurmountable figure within the broader context of the national budget.

A Treasury spokesperson said:
“We remain committed to reducing child poverty, and our investments in education and early years support will help break the cycle of disadvantage. However, tough choices are necessary to ensure long-term fiscal stability.”

This stance has frustrated campaigners who argue that the moral and social costs of inaction are far higher in the long term. They note that failing to invest in the wellbeing of children now will lead to higher public spending in the future — in healthcare, education support services, and social care.

A Defining Test for Labour’s Credibility on Social Justice

The debate around the two-child benefit cap is shaping up to be a major early test for Labour’s credibility on poverty reduction and social justice. For many observers, the decision not to scrap the cap casts doubt on the government’s readiness to reverse austerity-era policies that continue to harm vulnerable communities.

While Reeves’ education and childcare commitments represent progress, they are not seen as substitutes for direct support. Campaigners insist that a comprehensive child poverty strategy must include both service provision and adequate financial assistance to families.

As the new government continues to roll out its agenda, pressure is likely to mount to reconsider this policy. Whether Labour chooses to act on it may well define the legacy of its first term in power.

Conclusion

The decision to retain the two-child benefit cap, despite a broadly progressive spending review, has stirred criticism from child welfare organisations, opposition MPs, and grassroots activists alike. They argue that without addressing this core policy, the government’s promises of fairness and renewal will ring hollow for millions of struggling families. As public debate continues, the issue remains a critical litmus test for the government’s commitment to ending child poverty in the UK.