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The Scottish Government on Wednesday pledged to lift the two-child benefit cap next year, part of a package of measures to reduce child poverty and boost public services in line with First Minister John Swinney’s policy priorities.
Delivery of the Scottish Budget 2025-2026, Finance Secretary Shona Robison she said she would work with London to lift the cap that prevents most parents from claiming extra welfare benefits if they have more than two children.
“Make no doubt, the cap will be lifted,” she told MSPs at Holyrood, saying the Scottish National Party’s decision to scrap the “disastrous” policy would lift 15,000 children out of poverty from April 2026 – a month before Scots vote in the general election .
Despite pressure from the SNP and within the Labor Party to scrap it, the UK government has retained the two-child limit.
In a budget she said “brings progress”, Robison set a record £21bn for health and social care, including an extra £2bn for frontline NHS services. She also announced £768m in affordable housing funding, an £800m increase in social benefits, a blanket winter fuel payment for pensioners and an extension to free school meals.
Since replacing Humza Yousaf as SNP leader and First Minister in May, Swinney has promised a return to vital issues such as public services and economic growth.
The turnaround comes as the pro-independence party prepares for Holyrood elections in May 2026 after a heavy defeat in the UK general election in July.
Wednesday’s statement increased tax thresholds for low- to middle-income earners, lifted a cap on local authorities to raise council tax and provided relief on business rates for hospitality groups struggling to recover from pandemic-induced lockdowns.
With “ambition” to “green re-industrialise” Scotland, Robison said the government would triple investment in offshore wind to £150m next year, along with £25m for new jobs in the green energy supply chain and a £300m investment pounds in heating and insulation upgrades.
Her budget was “filled with hope for the future of Scotland”, Robison added, although financial pressures remained due to decisions made in London.
In her October Budget, UK Chancellor Rachel Reeves delivered a £47.7bn settlement for Scotland for 2025-26, the biggest in real terms since devolution.
The settlement included an extra £3.4bn — £2.8bn of which is day-to-day spending — through the Barnett formula, the mechanism Westminster uses to fund the budgets of devolved administrations in Scotland, Wales and Northern Ireland.
The SNP minority government must secure the support of at least two MSP opposition MPs to pass the budget. Failure to do so would trigger snap elections, but most analysts say there is little appetite for an election before the planned May 2026 election.
Support for Scottish Labor has waned during British Prime Minister Sir Keir Starmer’s difficult first five months in office.
Ahead of the budget, the SNP held talks with the Scottish Greens, with whom it formed a coalition government until April, about securing support.
But after the statement, Ross Greer, the party’s finance spokesman, said the Scottish Greens could not support the plan in its current form, arguing the plans “do not go far enough to protect local services. . . or to solve the climate crisis”.
The Liberal Democrats’ key demands were included, said Alex Cole-Hamilton, the party’s leader in Scotland. “But we are still a long way from any agreement,” he warned, calling for more money for children’s mental health.
The Budget awarded a £34m boost to culture in 2025-26, taking the devolved government halfway to its commitment to increase arts funding by £100m a year by 2028-29.
