FM pledges more cash for tackling poverty after Reeves scraps two-child cap

Money freed up in Holyrood’s Budget as a result of Chancellor Rachel Reeves scrapping the two-child benefit cap will be used to fight poverty, Scotland’s First Minister pledged.

John Swinney made the commitment after the Chancellor said the UK Government would abolish the controversial policy, which means families can only claim benefits for their first two children, from April this year.

Some 95,000 children in Scotland will benefit from the move, the UK Government said.

But with the Scottish Government having already pledged to mitigate the  benefit cap, campaigners against child poverty said Holyrood ministers would now have about £150 million more to spend in 2026-27.

Mr Swinney meanwhile said “the UK Government will be implementing a policy that Scotland was planning to implement already”, adding that this will “free up resources” for other purposes.

Speaking to the PA news agency during a visit to Dublin, the SNP leader added: “I’ve made clear is that, were this to happen, we would deploy any expenditure freed up to support wider measures to eradicate child poverty, to make sure that the mission of the Government to eradicate child poverty is further fuelled by a policy change of this type.”

However he said that overall the UK Budget “has not met the needs of people in Scotland”.

In her statement to MPs, Ms Reeves said the Scottish Government would get an £820 million funding boost, claiming the money was being allocated because Scottish Labour leader Anas Sarwar “asked us to”.

Families in Scotland will also benefit from an average £150-a-year cut in energy bills announced by the Chancellor.

But on what he said had been a “rather shambolic day” for the UK Government after a “technical error” resulted in key documents being released early, Mr Swinney said on the “central issue” of energy bills, households would still be worse off.

He said: “The Government was elected on a commitment to reduce energy costs and they will still be higher as a consequence of the Budget announcement today.

“So that demonstrates that this Budget has not met the needs of people in Scotland who are living in a country that is generating huge amounts of energy but is also living with high levels of fuel poverty and the Budget will not have addressed that for Scotland.”

Scottish Labour leader Anas Sarwar said: “I demanded a Labour Budget rooted in Labour values and that is what the Chancellor has delivered today.”

The Budget also included a rise in the minimum wage, and Mr Sarwar added: “This Budget means child poverty down, energy bills down, wages up and austerity rejected.”

UK Government figures also showed that 220,000 people in Scotland would benefit from wage increases announced by the Chancellor, with 1.1 million pensioners to benefit from the increase in state pension.

Scottish Secretary Douglas Alexander urged ministers at Holyrood to spend the additional money they will receive on frontline services.

Mr Alexander said: “We promised this would be a government focused on Scotland when we were elected last year and we warmly welcome the additional resource that has been committed to the Scottish Government.

“We will be urging them to spend the money on Scotland’s frontline public services.”

However Scottish Finance Secretary Shona Robison said the Budget had failed to provide the “step change” in support for public services, jobs and industry she had been looking for.

Instead of this, Ms Robison said, there had been a “chaotic mess”, adding that “the increase in funding for the Scottish Government will not even cover half the cost of the employers’ national insurance contributions brought in this year”.