Scottish ministers are facing calls to hike spending on social security in the wake of Chancellor Rachel Reeves’s “transformational” commitment to end the two-child cap.
Ms Reeves said the policy, which means families can only claim some benefits for their first two children, will end in April.
With the Scottish Government already having announced plans to mitigate the impact of the cap, the Chancellor’s decision – which she said is “fully costed and fully funded” – will free up funds in the Scottish budget for next year.
The announcement came as part of a UK Budget which Ms Reeves said would see an extra £820 million go to the Scottish Government over the spending review period.
“Because Anas Sarwar asked us to.” 👏 pic.twitter.com/9GprYlvLxN
Speaking afterwards, Scottish Labour leader Anas Sarwar said: “I demanded a Labour Budget rooted in Labour values and that is what the Chancellor has delivered today.”
The Budget also included a rise in the minimum wage and action on energy bills – which will see the average household bill fall by £150 next year – and Mr Sarwar insisted: “This Budget means child poverty down, energy bills down, wages up and austerity rejected.”
Overall he said the UK Government’s actions will result in “thousands of Scottish children lifted out of poverty, £150 off energy bills, £300 for those most in need, increases in the living wage and £820 million extra for the Scottish Government”.
Elsewhere in the Budget, the Chancellor pledged “over £14 million for low-carbon technologies in Grangemouth”, where the community was hit by the closure of the oil refinery earlier this year.
Mr Reeves also promised £20 million for the Inchgreen marine park in Inverclyde to help deliver jobs in the area, and £20 million towards redeveloping Kirkcaldy town centre and sea front in Fife, with construction due to start next year.
After the Chancellor’s headline announcement on scrapping the two-child cap, John Dickie, director of Child Poverty Action Group (CPAG) in Scotland, said SNP ministers must now use the extra cash this will free up to “further boost Scottish social security for families”.
He suggested the money could be used to increase the Scottish child payment “toward the £40 a week that is needed”, as he said ending the cap will be “transformational for children” and provide a “much-needed fresh start in efforts to eradicate child poverty across the UK”.
Speaking on behalf of members of End Child Poverty in Scotland, Mr Dickie said: “The UK Chancellor’s decision to scrap the cruel two-child limit is absolutely the right thing to do.
“The Scottish Government has committed to mitigating the two-child limit so the very welcome decision to abolish the policy at source frees up over £150 million in the 2026-27 Scottish budget.
“Ministers have already promised to use this money to tackle child poverty and we urge them to use it to further boost Scottish social security for families.
“It is vital that the money freed up today is spent on increased social security support and that it adds to existing commitments to fund the childcare, whole-family support, employment and housing that are also crucial to families.”
Chris Birt of the Joseph Rowntree Foundation in Scotland challenged the First Minister to “come good” on previous commitments to use the money earmarked for mitigating the two-child cap on tackling child poverty.
He welcomed Ms Reeve’s decision to end the “cruel and unfair” policy and said John Swinney now has the option to further increase the Scottish child payment.
This would be the “most direct way of putting money in the pockets of struggling families”, Mr Birt said, as he urged SNP ministers to use the cash to “take bold action targeted at those who need help the most”.
