Analysis by the Daily Mail indicates that families residing in areas with significant immigration might be nearly twice as likely to benefit from the removal of the two-child benefit cap.

In regions characterized by high immigration, 2.2 percent of households are expected to gain from this policy shift, compared to only 1.2 percent in areas with lower immigration levels.

Localities with substantial foreign-born populations, such as Barking and Dagenham, Luton, and Newham, could see up to 4 percent of households benefitting from Labour’s decision to abolish the two-child benefit limit.

Robert Bates, who serves as the research director at the Centre for Migration Control, commented to the Daily Mail that this move represents “another blow to citizens adhering to the rules, and a boon for high-migration areas.”

The data reveals that in the east London borough of Barking and Dagenham, approximately 4.2 percent of households (3,400 out of 82,000) are likely to see their benefits increase, as they will soon be eligible for additional child-related support—the highest proportion for any council area in the UK.

According to the 2021 Census, over 41 percent of the borough’s residents were born outside the UK, ranking it 16th highest in terms of foreign-born population in the country.

Similarly, 3.8 per cent of households in Luton and 3.4 per cent in Brent – where 38 per cent and 54 per cent of residents are foreign-born, respectively – will benefit from the benefits boost.

However, wealthy London boroughs with high rates of foreign-born residents defy the trend. Kensington and Chelsea (54 per cent), Westminster (56 per cent) and the City of London (50 per cent) are among the least likely to benefit from the change.

It is not possible to say for certain that the families claiming more benefits in these areas are immigrants, as correlation does not always imply causation, and other factors may apply. 

Mr Bates added: ‘There is no moral, fiscal or political justification for spending tens of billions of pounds every year in asylum costs, foreign aid and welfare handouts to migrants. 

‘This is especially true at a time when British citizens are at breaking point and our country is at an ever-accelerating doom loop.

‘Boosting fertility requires tax breaks and for young Brits to feel like the country is worth bringing life into.

‘Migration has swamped the housing market, attacked productivity, and undermined early stage job opportunities, all of which make it far more difficult for young people to start families.’

A 2022 Children’s Commissioner report found that 38 per cent of Bangladeshi families and 41 per cent of Pakistani families had three or more children, compared to only 14 per cent of White British families.

And the most recent child poverty figures show nearly half of children from black and Asian communities were in relative child poverty, compared with only a quarter of white children.

The £3billion cost of scrapping the two-child cap will be met by some of the £30bn barrage of tax increases the Chancellor announced at the budget this week 

Labour MPs fear the disparity between who benefits from the policy could become a ‘political flashpoint’, the FT reports.

Chancellor Rachel Reeves’ Budget was branded as one for ‘Benefits Street’ as opposed to hardworking British families, by leader of the opposition Kemi Badenoch.

The £3billion cost of scrapping the two-child cap will be met by some of the £30bn barrage of tax increases she announced.

The benefit cap means-tested benefits such as Universal Credit and child tax credit payments to the first two children, costing affected families a typical £3,455 in lost benefits for each additional child.

Figures produced by the Department for Work and Pensions (DWP) show that 470,000 families are now affected by the policy.

About 59 per cent have at least one adult in work, leaving almost 200,000 in which no-one has a job.

Rachel Reeves putting the finishing touches to her tax raising budget earlier this week 

Almost two-thirds (297,000) have three children, while a quarter (117,000) have four. A further 37,000 affected families have five children, while 18,260 are listed as having ‘six or more’.

The latest statistics show that 72,600 of those affected by the cap are in London. Newham makes up 4,580 of that, with Tower Hamlets 4,490 and 3,710 in Hackney. 

There were 17,990 currently under restrictions in Birmingham, and 7,800 in Manchester. The level for Bradford was 8,020. 

At present, a single parent with three children is eligible for a total of £20,978 in benefits.

But when the cap is lifted, this could rise to £24,491 – well in excess of the £21,807 take-home pay of someone working a 40-hour week on the minimum wage.

Ditching the policy will result in an estimated reduction of child poverty by 450,000 by 2029/30, the Government’s independent spending watchdog said.

The Government had been under increasing pressure from anti-poverty campaigners, as well as many of its own Labour MPs, to end a policy introduced under the Conservatives.

The two-child limit – first announced in 2015 by the Conservatives and which came into effect in 2017 – restricts child tax credit and universal credit to the first two children in most households.

When the policy was introduced by George Osborne, he said it was so that families on benefits faced ‘the same financial choices’ as those in work when deciding whether to have more children.

But research suggests the policy has only had a very small impact on whether people decide to have more than two children.

The rise in child poverty is being ‘entirely driven by a large increase in relative poverty among families with three or more children’, according to the Institute for Fiscal Studies.

In 2023-24, the proportion of children growing up in relative poverty in a household of three children or more was almost 44 per cent.

But in comparison, two-child households had a poverty rate of 25 per cent, and single-child households only had a rate of 21 per cent. 

The child poverty statistics have not been helped by the fact that the number of children living in large households has risen by almost a third since 2017, from 3.8 million to just under 5 million. 

This could be down to rising immigration, particularly of people who have moved to the UK from outside the EU.

The chancellor Rachel Reeves made the decision to hike taxes by £30billion on budget day, blaming the Conservatives, Brexit and Donald Trump’s tariffs for knocking the economy off course. 

The scrapping of the two-child cap will mean more than £14,000 a year each to 18,000 low-income families with six or more children.

The move comes as a study by the Adam Smith Institute finds the average earner will see almost £2,000 of their taxes go towards Britain’s spiralling benefits bill this year.

Critics of the cap claim it has worsened child poverty, and scrapping it has become an article of faith for many Labour MPs. But the potential rise in benefits is so large that some could be left with little incentive to work. 

Government sources stress that eligibility for Universal Credit is based on immigration status and residence requirements, not nationality, and the scrapping of the cap does not change the existing eligibility rules. 

And as part of the Home Secretary Shabana Mahmood’s immigration reforms, migrants reliant on benefits will face a 20-year wait for settlement – quadruple the current period and the longest in Europe.

A Government spokesperson said: ‘Nine in ten children impacted by the two-child limit have a UK-born parent.

‘With almost three-quarters of children in poverty living in working households, this government is determined to give 550,000 of them a better start in life.’