The SNP has promised to ditch the “pernicious” two-child benefit cap in Scotland, as it challenged Labour to help end the policy north of the border.
Finance Secretary Shona Robison made the surprise pledge as she set out the Scottish Government’s Budget at Holyrood, saying the cap had “caused misery” for families.
Anti-poverty charities have long called for an end to the “cruel” cap brought in across the UK by the Conservatives in 2017, which prevents parents from claiming universal credit or child tax credit for a third child.
Robison condemned Sir Keir Starmer’s Government for failing to ditch the cap, and said she would now begin work to end the policy for Scottish families “as early as we can in 2026”.
She suggested the SNP would “mitigate” the cap through discretionary top-up payments to families with more than two children, but did not make clear exactly how the devolved administration would do so.
While some benefits are devolved to Scotland, the Department for Work and Pensions (DWP) is responsible for the relevant welfare payments: universal credit and child tax credit.
Robison said the Scottish Government would work on implementation throughout next year so it can be ditched in Scotland in early 2026, and would be asking the DWP for the relevant benefits data.
“Be in no doubt – the cap will be scrapped,” Robison told Holyrood. “My challenge to Labour is to work with us – join us to end the cap in Scotland.”
She added: “Let me be crystal clear: this [SNP] Government is ending the two-child benefit cap, and in doing so will lift over 15,000 Scottish children out of poverty.”
Scottish parents on low incomes already benefit from an extra £26 a week for each child under the age of 16 through the Scottish Child Payment, brought in by the SNP in 2021.
The so-called Barnett formula – which determines the block grant the UK Government gives to Scotland – means Scots benefit from more per head in public spending than the UK average.
The Child Poverty Action Group in Scotland welcomed the move on the two-child cap but warned that the poorest families “really can’t wait until 2026”. The Joseph Rowntree Foundation said the SNP’s announcement was “positive recognition that political choices can reduce poverty”.
It came as Robison confirmed that all pensioners in Scotland will receive a £100 winter heating payment next year in a further attempt to embarrass Labour, following Chancellor Rachel Reeves’s decision to scrap universal winter fuel payments in England and Wales.
The Finance Secretary also announced that health and social care will receive a record funding settlement of £21bn in 2025-26, a £2bn increase in spending.
Robison said it would mean that by March 2026, no one in Scotland will wait longer than 12 months for a new outpatient appointment, inpatient treatment or day case treatment.
It followed this week’s damning Audit Scotland report, which warned that there was “no clear plan” to cut waiting times and that some NHS services may even have to be cut.
The SNP also lifted the freeze on council tax, allowing cash-strapped local authorities to hike the levy in a bid to avoid cuts to vital services.
Robison announced a £1bn uplift for local authorities for next year – but urged town halls to keep any increases to billpayers as low as possible. “There is no reason for big increases in council tax next year.”
After controversial changes made to Scotland’s income tax rates at last year’s Budget, asking higher earners to pay more, Robison said the current rates and bands would now be frozen until 2026.
The SNP still faces some difficult weeks ahead in trying to pass the Budget. Two MSPs short of a working majority, John Swinney’s party is relying on either the Scottish Liberal Democrats or the Scottish Greens to get their economic plan through at a crucial vote in February.
The Greens said it could not back the SNP’s Budget as things stand. Finance spokesperson Ross Greer said the plans did not go far enough to protect local services or tackle the climate crisis, but said his party was “prepared to work with the SNP” to make improvements in the weeks ahead.
The Lib Dem leader Alex-Cole Hamilton welcomed the extra spending on social care, dentistry and mental health, but said his party needed time to consider whether to back the Budget. “This does not guarantee our support. As with all Budgets, the devil will be in the detail,” he said.
Scottish Labour, which is not expected to support the Budget, said the SNP had benefited from an extra £5bn for Scotland from Reeves’s Budget, but had failed to offer necessary NHS reforms or vision for economic growth.
“This Budget amounts to more of the same, sending Scotland ever faster in the wrong direction,” said Labour’s finance spokesperson Michael Marra.
The Scottish Conservatives also condemned the Budget as “more of the same from the SNP”. Finance spokesperson Craig Hoy said voters would be disappointed with the lack of tax cuts.
SNP relief as Lib Dems offer warm words on backing Budget
SNP leader John Swinney will be relieved by the warm response to his Government’s Budget by the Scottish Liberal Democrats. As a minority administration, the SNP appears to be relying on the Lib Dems to get its spending plan passed at Holyrood early next year.
Leader Alex-Cole Hamilton said he was pleased to see several key Lib Dem demands had been included – including extra spending on local government, affordable homes, social care, GPs, dentists and mental health.
A Lib Dem source told The i Paper they were also satisfied that there was no spending outlined on Scottish independence planning in the Budget. But the party still wants assurances that it won’t be resurrected in the year ahead.
The SNP aren’t quite out of the woods yet. Cole-Hamilton has warned Swinney that “the devil is in the detail” as his team pours through the spending plan line by line.
If some hidden cuts emerge in the coming days and threaten to be unpopular with Lib Dem voters, the SNP could still be in trouble. Failure to pass the Budget could trigger an early election in spring 2025.
Meanwhile, the SNP has left Labour with a major political headache after vowing to find the money to scrap the two-child benefit cap in Scotland.
Finance Secretary’s Shona Robison “rabbit in the hat” puts both Keir Starmer and Scottish Labour leader Anas Sarwar in an awkward position.
Mr Sarwar has previously said the policy introduced by the Conservatives is “wrong”, insisting that he would press Starmer to ditch it as soon as public finances allowed.
Scottish Labour was expected to vote against the SNP’s Budget, keen not to be seen backing their main rivals for power.
But the SNP will now be able to say that Mr Sarwar’s party is voting down a Budget plan that aims to lift 15,000 Scottish children out of poverty.
The SNP’s crafty move will also raise the thorny issue again at Westminster, where many left-wing Labour MPs remain irritated that Chancellor Rachel Reeves has not ended the benefit cap.
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