Scottish government vows to scrap two-child benefit cap

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The Scottish government on Wednesday vowed to end the two-child benefit cap next year, part of a package of measures to cut child poverty and boost public services in line with first minister John Swinney’s policy priorities.

Delivering Scotland’s Budget for 2025-26, finance secretary Shona Robison said she would work with London to abolish the cap that stops most parents claiming additional child-related welfare payments if they have more than two children.

“Be in no doubt, the cap will be scrapped,” she told MSPs at Holyrood, saying that the Scottish National party’s decision to scrap the “pernicious” policy would lift 15,000 children out of poverty from April 2026 — one month before Scottish residents vote in parliamentary elections.

Despite pressure from the SNP and inside the Labour party to axe it, the UK government has maintained the two-child limit.

In a Budget that she said “delivers progress”, Robison set out a record £21bn for health and social care, including an extra £2bn for frontline NHS services. She also announced £768mn to fund affordable housing, an £800mn boost in social security benefits, universal winter fuel payments for pensioners and an expansion of free school meals.

Since replacing Humza Yousaf as SNP leader and first minister in May, Swinney has vowed a return to bread-and-butter issues such as public services and economic growth.

The pivot comes as the pro-independence party prepares for Holyrood elections in May 2026 after a bruising defeat in the UK general election in July.

Wednesday’s statement increased tax thresholds for low to mid earners, removed the cap on local authorities raising council tax and provided business rates relief for hospitality groups that have struggled to recover from pandemic lockdowns.

With an “ambition” for a “green re-industrialisation” of Scotland, Robison said the government would triple investment into offshore wind to £150mn next year, along with £25mn for new jobs in the green energy supply chain and a £300mn investment into upgrading heating and insulation.

Hers was “a Budget filled with hope for Scotland’s future”, Robison added, even as financial pressures persisted because of decisions taken by London.

In her October Budget, UK chancellor Rachel Reeves delivered a £47.7bn settlement for Scotland in 2025-26, the largest in real terms since devolution.

The settlement included an additional £3.4bn — of which £2.8bn is day-to-day spending — via the Barnett formula, the mechanism that Westminster uses to fund the budgets of the devolved administrations in Scotland, Wales and Northern Ireland.

The SNP minority government needs to secure the support of at least two opposition MSPs to pass the Budget. Failure to do so would trigger a snap election, but most analysts say there is little appetite for an election ahead of the scheduled May 2026 polls.

Support for Scottish Labour has waned during UK prime minister Sir Keir Starmer’s rocky first five months in power.

Ahead of the Budget the SNP held talks with the Scottish Greens, with which they formed a coalition government until April, about securing support.

But after the statement, Ross Greer, the party’s finance spokesperson, said the Scottish Greens could not back it in its current form, arguing that the plans “do not go far enough to protect local services . . . or to tackle the climate crisis”.

Key Liberal Democrat demands had been included, said Alex Cole-Hamilton, the party’s leader in Scotland. “But we are still a long way off from any kind of agreement,” he cautioned, calling for more money for mental healthcare for children.

The Budget allocated a £34mn uplift for culture in 2025-26, taking the devolved government halfway to its commitment to increase funding for the arts by £100mn per year by 2028-29.