By JAMES TAPSFIELD, UK POLITICAL EDITOR

Published: 10:55 GMT, 8 January 2026 | Updated: 16:14 GMT, 8 January 2026

Rachel Reeves hit out at 'racist' criticism of her decision to scrap the two-child benefit cap today.

The Chancellor accused Nigel Farage of only wanting white people to get welfare after he warned Labour's policy means money for 'huge numbers of foreign-born people'. 

The Bill to end the cap is being formally introduced into Parliament after the move was announced in the November Budget - alongside another barrage of tax rises.

The Government bowed to huge pressure from Labour MPs and ministers despite initially warning about the £3billion a year cost.

Supporters say removing the limit will lift around 450,000 children out of poverty by 2030.

Rachel Reeves accused Nigel Farage of only wanting white people to get welfare after he warned Labour's policy will benefit 'huge numbers of foreign-born people'

Mr Farage has said he supports lifting the cap, but only for 'British working parents'

Keir Starmer is going on the attack by accusing Reform and the Tories of a 'cruel alliance to push kids who need help back into poverty'.

And speaking to The Guardian, Ms Reeves suggested Mr Farage's comments about 'foreign-born' benefits recipients were racist.

'I don't really care what colour a kid's skin is - some deserve to be in poverty and some don't? That makes me pretty angry,' she said. 

'Does Nigel Farage want to go around and say - "White? Yeah you can have the money. Black? No I'm sorry it's not for you." What sort of country does he think we are?

'If you're the mum next door who works in the NHS, has lived here all her life, her kids lived here all their life, but she was born somewhere else - we're saying that family deserves to grow up in poverty whereas the one next door doesn't? That's not the sort of country I believe in.'

The jibe drew a furious response from Reform policy chief Zia Yusuf, who insisted it amounted to 'ethno-nationalism'.

He posted on X: 'She believes only white people can be British. She's accused Nigel Farage of racism for wanting to keep the 2 child cap in place for everyone except British-born families, equating 'foreign-born' with 'non-white.' 

Conservative shadow chancellor Sir Mel Stride said the 'most effective way to tackle child poverty is to build a stronger economy'.

He said: 'Labour's approach does the opposite. Because Keir Starmer and Rachel Reeves do not have the backbone to stand up to their left-wing MPs, they are hiking welfare spending, paid for with higher taxes which are killing growth and costing jobs.'