Labour Unveils New Child Poverty Strategy with Emphasis on Welfare Reform
Labour has published a new child poverty strategy aimed at improving children's lives and long-term outcomes through further welfare reform, rather than just redistributing money. The flagship policy is ending the two-child limit on universal credit, which will cost around £3bn and is expected to lift 450,000 children out of poverty by 2031.
Additional measures in the strategy include helping parents buy cheaper baby formula, reducing time spent in temporary accommodation, establishing breakfast clubs, and extending free school lunches. Pat McFadden indicated that there will be more welfare reforms beyond the current package designed to enhance work incentives and reduce overall costs.
Labour also celebrated the scrapping of the two-child limit and noted that ministers were compelled to abandon plans to cut disability benefits in July 2025. Two reviews are currently underway: the Timms review of disability benefits and a Milburn-led review focusing on youth inactivity. Chancellor Rachel Reeves emphasized that the benefits bill cannot remain unchanged.
The policy focus centers on encouraging people into work, with arguments that those who remain on benefits suffer financially and impose higher costs on the state over their lifetime. The two-child limit was originally introduced by the Conservative government in 2017 and has become a significant political dividing line rather than solely a budgetary matter.
