SNP to axe UK Government’s controversial two-child benefit cap for thousands of Scots families in today’s Budget

THE Scottish Government has announced today that it will spend millions of pounds to “mitigate” Westminster’s controversial two-child benefit cap.

Finance Secretary Shona Robison made the announcement in her Holyrood Budget speech this afternoon

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PA

Speaking today, she said: “We will mitigate the two-child cap.”

But Ms Robinson added that it would be from 2026, not next year, and it would lift more than 15,000 children out of poverty.

She has urged Labour to work with her to deliver it, complaining that the UK Government’s Department for Work and Pensions had access to the data that would allow the government to do so.

Ms Robison added: “We will work as hard as possible in 2025 so we can start paying families in 2026. The cap will be scrapped.”

It comes after Sir Keir Starmer came under fire for sticking with the Tory policy despite Labour winning power at the General Election.

A source said: “This is the big rabbit out of the hat. It’s designed to stick it right to Labour.”

The UK-wide cost of lifting the cap is reported to be around £3.4billion, meaning the cost for Scotland could be more than £250million, based on population share.

On the plans to mitigate the two-child cap, the Scottish Fiscal Commission said their spending projections did not include it, due to the government not telling them about it in time.

The independent fiscal watchdog said the policy was a “significant commitment” to additional spending from 2026/27 onwards.

They said the full-year costs in 2026-27 could be around £150m, increasing to over £200m in 2029-30.

John Swinney requires at least two votes to pass his budget when it is voted on in the new year.

Holyrood insiders believed the Lib Dems would be the most likely party to back the SNP, but a senior Scottish Government source told The Scottish Sun this week that the budget would throw the gauntlet down to Scottish Labour.

They claimed: “It’s all on Anas.”

SNP chiefs are also understood to be planning a potential general election campaign on Scottish Labour’s potential opposition to the budget, given its commitment to bring in a new £100 Winter Fuel Payment to replace the one cut by UK Labour at their budget.

The benefit cap generally disallows benefits being claimed based on having more than two children.

Scottish Labour leader Anas Sarwar has said his party disagrees with UK Labour’s stance on keeping the policy until it can afford to lift it.

Last year, Mr Sarwar previously said he would “press” a UK Labour Government to drop it – with a number of MSPs hitting out at Sir Keir’s stance.

We told last year how just one in three Scots think the two-child benefits cap should be axed, despite SNP anger over the policy.

The controversial rule was backed by 50 per cent of over-16s, according to YouGov polling.

And only 32 per cent – just under a third – said it should be abolished, with 19 per cent of people unsure.

But the SNP and anti-poverty charities ramped up criticism of the cap following Sir Keir saying in 2023 he’d keep it if he gets into Downing Street.

The policy applies to benefits including Child Tax Credit and Universal Credit, and stops parents from claiming for a third or additional child born after April 2017.

It does not apply to Child Benefit.

Several exceptions are allowed, including for multiple births, adoptions, and for children born as a result of rape – leading to rivals branding the policy the so-called “rape clause”.

Last year, Sir Keir hit back at criticism of his pledge to keep the policy, saying Labour needed to make “tough decisions” due to a lack of cash.

But analysis produced by the House of Commons Library suggested an additional 20,000 Scottish children would be pushed into “relative poverty” – households with income below 60 per cent of the national median – as a result of the cap in 2023-24.

The move would add to the Scottish Government’s growing additional spend on benefits since parts of welfare were devolved under a powers deal following the 2014 independence referendum.

Due to additional spending decisions, the Scottish Government is spending around £1.1bn more this year than would have been spent in Scotland if devolution of welfare hadn’t taken place.

This is forecast to be spending £1.5bn more by 2028-29, the Scottish Fiscal Commission said earlier this year.

Children and Young People’s Commissioner Nicola Killean previously expressed deep disappointment with the UK Government’s decision to retain the two-child benefit limit.

She called the policy a clear violation of children’s rights, arguing that it contributes significantly to child poverty in Scotland, where one in four children lives in poverty.

Ms Killean said: “Poverty remains the most significant human rights issue facing children in Scotland today. Around one in four children are living in poverty.

“Since becoming Commissioner last year, children have consistently told me how concerned they are about poverty and how worried they feel for family members and friends. Poverty impacts on all aspects of a child’s life including their rights to physical and mental health, to education, to access opportunities to socialise and play.

“The two-child benefit cap is a clear violation of children’s human rights as set out in the United Nations Convention on the Rights of the Child (UNCRC). It breaches children’s right to an adequate standard of living, contributes to a rising gap in poverty levels between families with three or more children and smaller households and disproportionately impacts on social groups where larger families are more common, such as some minority faith and ethnic groups.”

Those earning less than around £30,300 – which is around 51 per cent of Scottish taxpayers – will continue to pay slightly less Income Tax in 2025-26 than if they lived elsewhere in the UK.

That figure was £28,867 this year and it means Scots on under £30,300 will be a maximum of £28 – or 54p a week – better off than counterparts in the rest of the UK.