Britain's Rayner leaves door open on benefit reform as Farage ups pressure

Kit Rees, Bloomberg News on May 25, 2025

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U.K. Deputy Prime Minister Angela Rayner left the door open on whether the government will lift the two-child benefit cap even as Nigel Farage’s Reform U.K. seeks to outflank the ruling Labour Party in bringing down the cost of living.

“Lifting any measures that will alleviate poverty on some of the poorest families is not a bad idea, but we’ve got to look at it in the realm there is other pressures,” Rayner said on Sky News. “It’s not a silver bullet.”

The government is under pressure to find ways to lower living costs following bruising local election results, with recent inflation data showing that consumers are being squeezed from all sides amid higher water bills, train fares and local authority taxes.

After telling Parliament last week he would reconsider the threshold at which pensioners lose their entitlement to the winter fuel allowance — a move that would mark the government’s sharpest U-turn since returning to power, Prime Minister Keir Starmer is facing repeated calls from lawmakers to reverse the child benefit cap, which currently limits payments to two children per household.

Reform U.K., a right-wing populist party headed by Farage, is set to commit to scrapping the two-child benefit cap, introduced by the Conservatives in 2017, and fully reinstate the winter fuel payment, according to a report in the Telegraph on Sunday.

“Nigel Farage comes up with lots of ideas, they’re not necessarily good ideas and he doesn’t know how he’s going to pay for them,” Rayner said, when asked about Reform’s plans.

The debate over how far to go in making concessions has sparked debates within Labour. While Starmer is in favor of lifting the limit as a way to demonstrate the party’s commitment to alleviating child poverty, his chief of staff, Morgan McSweeney, has opposed the move, citing the estimated £2.5 billion expense, Bloomberg reported last week.

Also speaking on Sunday, Conservative leader Kemi Badenoch defended the two-child benefit cap, citing a growing welfare bill.

“The fact is, our welfare bill continues to grow. We’re spending over £100 billion on servicing debt interest every year with borrowing to pay welfare,” Badenoch told Sky News. “The two child benefit cap is reasonable. It’s the right thing to do. And we want people to know that we manage the economy properly. That’s what a government should be doing. I don’t think it is right to scrap it.”

Meanwhile, the Financial Times and Sunday Times said over the weekend that the government is considering restoring the winter fuel benefit to all pensioners and recouping the payment from higher-income pensioners through their taxes.

Rayner declined to confirm the report, saying that the Chancellor may set out any changes at the upcoming spending review next month.