Birmingham is home to more families with three or more children than any other UK city, making today’s Budget decision particularly significant for its poorest households.
Chancellor Rachel Reeves is widely expected to remove the harsh two-child benefit cap—a policy introduced over a decade ago that has been blamed for driving many children into poverty. This change would directly benefit approximately 67,230 children in Birmingham alone.
The cap currently restricts Universal Credit child element top-ups to only the first two children per household, leaving families with three or more children without additional support. Most affected parents are in work but rely on these benefits to make ends meet.
READ MORE: Sainsbury’s Faces Backlash Over Controversial Christmas Mince Pie Wrap
READ MORE: NatWest Appoints Andrew Hunter as Managing Director of Venture Capital Coverage
This issue topped the priorities in BirminghamLive’s Child Poverty Emergency project, which shed light on the profound impact political decisions have had on the city’s youngest residents.
Research shows that nearly one-quarter of Birmingham families have three or more children, with the highest concentrations in Ladywood, Hodge Hill & Solihull North, and Yardley—diverse constituencies among the city’s most affected.
Statistics reveal that 15.9% of Birmingham families have three children, 6.1% have four, and 2.8% have five or more.
Under current rules, Universal Credit’s child element supplement of £292.81 per month applies only to the first two children. Families receive no extra assistance for additional children, leaving a financial gap that pushes many into hardship.
While Labour previously condemned the cap as ‘disgraceful’ and harmful to children, it wasn’t prioritized during the party’s initial year in government. This stance is poised to change today amid mounting pressure from charities, campaigners, and Labour backbenchers.
Nationally, 469,780 Universal Credit households were affected by the two-child limit in the year leading to April 2025—59% of whom were working families.
In Birmingham, the impact varies across constituencies:
- Ladywood (Labour Home Secretary Shabana Mahmood): 11,490 children (34% of local children)
- Hodge Hill & Solihull North (Liam Byrne): 9,920 children (31%)
- Yardley (Jess Phillips): 8,030 children (29%)
- Perry Barr (Independent Ayoub Khan): 8,220 children (28%)
- Erdington (Paulette Hamilton): 7,300 children (27%)
In contrast, Sutton Coldfield (Conservative Sir Andrew Mitchell) has a much lower impact at 1,080 children (6%).
Ladywood, Hodge Hill & Solihull North, and Yardley rank among the top ten most affected areas nationally, with nearby Walsall & Bloxwich also highly impacted.
Campaigners argue that the government’s stated goal to eliminate child poverty cannot be achieved without ending the two-child benefit cap.
The Resolution Foundation estimates that easing the cap to cover a third child would cost £2.4 billion by 2029/30 but lift 280,000 children out of poverty. Completely abolishing the limit is believed to be the most cost-effective strategy for reducing child poverty.
Joseph Howes, Chair of the End Child Poverty Coalition, emphasizes: “The government’s mission to end child poverty will fail if this cruel policy remains. One in nine children currently live in households affected by the two-child limit. It’s time for the government to act.”
Prime Minister Sir Keir Starmer recently declined to commit to lifting the cap but affirmed that supporting families through the cost-of-living crisis remains his top priority.
Last July, several Labour MPs who voted to scrap the cap with the Scottish National Party faced disciplinary action, illustrating internal party tensions on this issue. Among those MPs was Coventry South’s Zarah Sultana, now co-leader of the Your Party movement.
The coming Budget decision could mark a pivotal moment for thousands of Birmingham children and their families striving to overcome poverty.