The abolition of the two-child benefit cap announced yesterday by Chancellor Rachel Reeves has been hailed by Luton Council as a turning point for many of the town’s poorest families.
From next April the scheme — which had limited benefit payments to two children per household — will be scrapped under the 2025 Budget, a measure expected to channel vital support to thousands of local children.
The council said the decision comes after sustained local lobbying and warnings over how the cap was driving hardship in Luton. In a letter to ministers in December 2024 the Council outlined how some 1,700 families in the town — accounting for over 6,000 children — had lost up to £3,235 per year for each extra child. The lifting of the cap could bring an estimated £9.2million a year into the most vulnerable households locally.
Council leader Hazel Simmons MBE said: “We are delighted the government will abolish the two-child benefit cap from April. We have lobbied hard for this change because, despite Luton’s resilience and the incredible efforts of our community, chronic underfunding has left too many families unable to make ends meet.
“It has been heart breaking to see the impact of this unfair policy on parents doing their very best. This is so important for our town. Thousands of Luton families will be lifted out of destitution, giving children the chance of a healthier, safer and more secure start in life. Luton’s 2040 vision commits the town to ensuring everyone can thrive and that no one lives in poverty by 2040 and today’s announcement marks a major step towards achieving that ambition.”
The budget includes a slew of supporting measures designed to ease pressure on households: regulated rail fares will be frozen for the first time in 30 years, easing commuting costs for many, while the national minimum wage will rise next year, and prescription charges in England will remain unchanged.
Local MPs welcomed the changes. In a Facebook post, Sarah Owen, MP for Luton North, said the budget was a “proper Labour budget” with relief for those “struggling at the sharp end of a broken economy” and argued that boosting pay and benefits would in turn strengthen the local economy through increased household spending.
Meanwhile Rachel Hopkins, MP for Luton South, told BBC Look East that ending the cap would lift 450,000 children nationwide out of poverty — including up to 5,000 in her constituency. She said the combination of frozen rail fares, higher wages and restored benefits showed that the government was building “an economy that works for everyone”.
In the Commons she pointed out that commuters in her constituency could save around £400 a year on season tickets thanks to the rail fare freeze — savings she said were only possible because of a Labour government.
The removal of the benefit cap is expected to cost roughly £3billion by the end of the current Parliament but marks a major shift in welfare policy and social support under the Labour administration.
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