Scottish Budget: Abolishing the two-child cap is a bold move, but a gamble

Shona Robison’s announcement that the Scottish Government intends to start mitigating the UK Government’s two-child cap from next year will go down as one of the biggest rabbits-out-of-hat moments in Scottish political history.

No one was really expecting it. It sends a strong signal about what this new-look SNP government is for. And it puts really pressure on Labour.

A little over an hour after Robison sat back down, my inbox is flooded with anti-poverty campaigners welcoming the move. The Joseph Rowntree Foundation say it’s a “positive recognition that political choices can reduce poverty”. Future Economy Scotland says it's “emblematic of the type of bold action we need to tackle child poverty”. And the Child Poverty Action Group says “there is no question this is the right focus for prioritising spend”.

Any policy which reduces the number of children living in poverty by 15,000 is a welcome one. And this seems like an easy win for the Scottish Government – particularly as many have been left confused as to why the Labour government has not immediately scrapped it.

There will naturally be questions around, if this was always possible, why now? Perhaps part of the equation is an assumption that the UK Government will move on this at some point. Its child poverty taskforce is currently exploring all the actions government could take to tackle the problem and is set to deliver in April. It seems highly unlikely that one of the top recommendations won’t be to scrap the cap.

In which case, this is a baller move by the SNP. It can claim to have consistently and repeatedly applied pressure on the matter, take credit for a victory – and crucially, not have to pay for it because it will come back to government coffers through Barnett.

But therein lies a possible big problem for it. At the moment, the Scottish Government admits it does not know how much mitigating the policy would cost. The Scottish Fiscal Commission has been unable to model it, partly because it was informed of the announcement too late, but warns: “This is a significant commitment to additional spending from 2026-27 onwards.” Illustrative analysis points to around £150m for the first year, rising to £200m by 2029-30.

I asked a government spinner doing the post-budget rounds in parliament what happens if it turns out to be a massive amount of money. “We will find the money – we always do,” was the reply.

But without significant tax rises – or spending cuts in other portfolios – it’s difficult to see how the Scottish Government would actually deliver it. That again brings you back to the UK Government’s taskforce. By announcing it now for 2026, Robison is effectively gambling on a UK-wide announcement. That may or may not be a smart move.

It will make uncomfortable times for Scottish Labour in the short-term, though. A spin doctor described it as “a rabbit out of the hat that doesn’t exist”, since it won’t come into play into 2026 and there are no costings attached. But the party will need to formulate some kind of response – and quickly – especially if the UK Government does not scrap it later this year.

It’s an announcement that plays into the SNP’s strengths and Labour’s weaknesses, and a good strategic move. But it could yet blow up in its face.