Two-child cap: How the SNP outmanoeuvred Labour

“Be in no doubt,” said Shona Robison, “the cap will be scrapped.”

It was an announcement kept until the end of the finance secretary’s draft budget statement, and it was the one which elicited the loudest applause in the chamber. The two-child benefit cap, put in place by the UK Government five prime ministers ago, has never been mitigated by the Scottish Government. But now, after receiving a record settlement from the Treasury, Scottish ministers are to act. 

The announcement dominated the headlines, giving the SNP a badly-needed win. Privately, sources from both that party and Labour said the budget had cabinet veteran Swinney all over it. “Underestimate him at your peril,” an SNP spinner said. But there will be no delivery of the policy within this budget year. And it will take collaboration with the UK Government for it to happen at all.

“Many expected an incoming Labour government to abolish the [two-child] cap,” Robison said of the David Cameron-era rule, which prevents families receiving benefits for more than two children. “We’ve waited but Labour haven’t delivered. This SNP government will.”

Scottish Labour’s Michael Marra accused John Swinney’s administration of dishing out “more of the same” after 17 years of SNP rule with a tax and spend plan that includes a £2bn increase in frontline NHS spending to tackle waiting lists, a £34m allocation for the culture sector and a freeze on income tax rates. 

But the party had nothing immediate to say about the two-child limit. And with this election-facing budget, the Scottish Government seemed to have out-manoeuvred Labour for the second time in a matter of days.

The first came when social justice secretary Shirley-Anne Somerville announced Scottish ministers would provide universal winter fuel bill help for pensioners, beginning in 2025. Scottish Labour had tried to take the initiative on that in a move which put it at odds with a policy its MPs had voted for. Somerville’s announcement enabled the SNP to tell the electorate it has brought forward a solution to a problem of Labour’s making. Now Robison has done the same, ramping up pressure on the already beleaguered UK Government. Research by Ipsos shows more than half of people (53 cent) are “disappointed” with the administration so far, and 45 per cent are dissatisfied with the job Keir Starmer is doing as prime minister.

But it’s not that the Scottish Government can claim stellar results itself. Trust in the Holyrood administration has fallen by 10 points in a year, according to the latest Scottish Household Survey, with confidence levels down too in the police, local government, the health service and education. 

Against this backdrop, the SNP is gambling on its two-child cap move being a vote-winner. Scottish Labour isn’t so sure it will be. “They ran the general election campaign on it, they ran in [the]Rutherglen [by-election] on it,” a source says with a shrug. “They lost both.”

And right now both governments are trying to win the public back onside.

In a St Andrew’s Day speech, First Minister John Swinney sought to redefine what his government means. Emphasising the values of collaboration and consensus-building, Swinney – who has bolstered his backroom team with the hiring of ex-local government minister Marco Biagi – said he would eschew a “top-down” approach to solving the “pervasive and entrenched” problems in health, housing and the economy, promising “to do the hard work to lay the foundations for lasting improvements to our country, our economy and our society”. “I do not pretend that this style of government is always headline-grabbing, but I do believe it is effective,” he said, “And, in the long run, I know the results will speak for themselves.”

Then, speaking the day after Scotland’s budget statement, the prime minister, who has promised to head a “mission-led government” and undertake “nothing less than the complete rewiring of the British state” to deliver “bold and ambitious long-term reform”, outlined milestones in his Plan for Change. “Hard-working Brits are going out grafting every day but are getting short shrift from a politics that should serve them,” he said. “They reasonably want a stable economy, their country to be safe, their borders secure, more cash in their pocket, safer streets in their town, opportunities for their children, secure British energy in their home, and an NHS that is there when they need it.”

While Starmer has the benefit of time to produce results – the next general election won’t happen until August 2029 at the latest – Swinney has just 18 months to play with and needs faster wins. Roz Foyer, general secretary of the Scottish Trades Union Congress, sensed opportunism in his government’s budget. “This was primarily an electioneering budget that used Scotland’s finances to commit to doing what the UK Labour government wouldn’t,” she said, welcoming investment in infrastructure and the green economy. Experts at the Fraser of Allander Institute had a similar take, noting the “troubling” lack of detail on exactly how much two-child benefit cap mitigation could cost.

Even the Scottish Fiscal Commission is in the dark on that, saying it received the policy news too late to add it to its number-crunching. Budget documents, too, failed to put a figure on it. It is, however, estimated that the move could cost the public coffers around £200m.

On this, Robison – whose budget speech, name-checking ministerial colleagues by portfolio and crediting them with influencing her final plan, seemed as much a statement of party unity as of economic intent – is perhaps in familiar territory. She was DFM to Humza Yousaf when he announced his council tax freeze in 2023, a move unveiled to an SNP conference audience with precious few details. Much work had to be done afterwards to ensure its delivery nationwide.

That freeze is now ending, much to the relief of town halls. Falkirk Council leader Cecil Meiklejohn and Midlothian Council head Kelly Parry are amongst those to welcome the news. Perth and Kinross Council has already approved a provisionsal 10 per cent rise for next year.

Will the mitigation of the two-child cap be as short-lived? A more pressing question is whether it will be delivered at all, given the review underway by a UK Government taskforce. The group, which includes Scottish secretary Ian Murray, is expected to report in a few short months. In November it visited Glasgow in what was its first visit to Scotland, with leader Liz Kendall – the work and pensions secretary – describing child poverty as “a moral stain on this country”.

If the taskforce recommends the lifting of the cap, SNP ministers may not have to find the money to take unilateral action. But they will be expected to claim some credit for the change, and indeed an SNP motion on the matter at Westminster resulted in the suspension of seven Labour rebels early in Starmer’s premiership. Speaking in the Scottish Parliament, Robison emphasised that the DWP must agree to share its data with Scottish colleagues in order for the mitigation move to work. “Implementation requires the cooperation of the UK Government,” Robison said. “My challenge to Labour is to work with us,” she went on. “Join us in ending the cap in Scotland. Give us the information that we need.”

But the SNP has rejected any suggestion that it is simply politicking on welfare. “The hard reality is now we are here to deliver for the people of Scotland,” a source said. “We are a party led by our principles. It’s what we do.”

“We are really working on that message of hope,” said a party spinner. “That’s something that has always been key to the SNP’s message and something that we are really building up.

“The party has undoubtedly had a difficult time, but I look at the progress we’ve made under the first minister, the general feeling that people are more confident. Things are on a more positive trajectory than they have been.”

Indeed, the SNP suffered heavy losses in the general election against a red rose resurgence which took Scottish Labour from two to 37 MPs. But on 30 and 35 per cent respectively, the parties remain relatively close on overall share of the vote. And each has the sense that there is all to play for. 

That sense is shared by rivals across the political spectrum from the Lib Dems and Greens to Alba and monied newcomer Reform UK, which is “on a bit of a roll”, according to pollster Mark Diffley. 

Nigel Farage’s party may lack a Scottish figurehead, but it is on the political map. While it is understood that Reform has eaten into Scottish Conservative support, it is less widely appreciated that the party has also taken votes from other parties too. In the recent Kilpatrick by-election in West Dunbartonshire – one of many triggered by the resignation of councillors who now sit in the Commons – it outperformed the Tories, Greens and Lib Dems on first preferences. “It’s definitely a protest vote,” said a Labour source, “but a protest against what is what we need to know. I don’t think it’s just immigration, it could be soft-touch justice or simply ‘anti-politics’, or something else.”

Reform held its first Scottish conference in Perth at the turn of the month and is predicted to enter the Scottish Parliament on the list, at least, in 2026. Diffley points to the ‘rainbow parliaments’ seen in earlier years of the Scottish Parliament. But he says those lacked a significant Reform-style presence, and suggests that could change the culture of the place.“We are pretty sure it will happen unless something odd takes place between now and 18 months’ time. The signs are there that Reform will have pretty significant representation in Holyrood and we are going to have to get used to it. 

“This is going to be an entirely different set up of Holyrood and it’s going to really test some of the consensus we have become used to.”

From what we know so far, Reform voters tend to be male and from older age brackets. And they are picking up support amongst those who feel disenfranchised and let down by the political mainstream. Given the falling levels of voter engagement in Scotland – turnout at the general election was down to 60 per cent – there may be many in Scotland receptive to its messaging. On the recent council by-election trail in Glasgow, some campaigners from major parties detected more hostility than they’d experienced before. “We were going door-to-door on one side of the street and Labour were going door-to-door on the other,” an SNP activist recalls, “and on both sides people were answering their doors and saying, ‘I don’t want to speak to you, fuck off’.”

If the sentiment is more widespread, it points to difficulties for mainstream parties who will spend the next 12 months getting into fighting shape ahead of the 2026 Scottish Parliament election against greater challenge in an increasingly multi-party system. And in that parliament, there is some talk of voter fatigue. “It has been such a heavy decade of politics,” a government insider says. “I’m not surprised a lot of people feel sick of it.”

Diffley says this is not a Scottish or a UK issue, and that lessons from the wider world could apply to the next Holyrood contest. In the past year, scores of elections have taken around two billion of the world’s citizens go to the polls, with turnout down in countries including Ireland and the USA. “There’s a lot of data and it’s telling us a lot of things. Turnout is one of them,” says Diffley, “and another is that the incumbent struggles. Even those who held on, like Modi in India, have done so with significantly reduced authority. This has not happened in any year since the war. That tells us something about dissatisfaction.”

After a gruelling five months since the general election, there is a sense of relief in the Scottish Parliament that recess is approaching quickly. “I’m crawling to the finish line,” one adviser confides. But MSPs know they are returning to budget scrutiny in January, and so the respite will be short-lived. 

Robison has challenged MSPs from across the chamber to back her budget bill, but there have been no promises of acquiescence from rival benches. The Greens have said “big changes will be needed” to ensure their support, saying the measures laid out do not go far enough to “protect local services like schools or to tackle the climate crisis”. Alex Cole-Hamilton of the Lib Dems has welcomed commitments on “social care, affordable homes, insulation, winter fuel payments, additional support needs, ferries, GPs, dentists, long Covid, mental health, Edinburgh’s Eye Pavilion, the Belford Hospital and business rate relief for hospitality” which he framed as concessions to his party, but he said “this does not guarantee our support”. Welcoming cash for more free breakfast clubs in primary schools, Alba’s Ash Regan said the full roll-out of universal entitlement to free school meals would be “a step in the right direction” towards securing her vote. And, opposing the two-child cap policy, Liz Smith said her Conservative colleagues believe its retention “is necessary and the right approach at this time”.

And so, it remains unclear who, if anyone, will help carry this bill through. Failure to do so would result in a snap election which could bring unprecedented change to the Scottish Parliament, and leave Robison’s commitments undelivered.