Craig Munro
Published February 3, 2026 4:56pm
Updated February 3, 2026 6:34pm
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Previous Page Next PageReform UK leader Nigel Farage has announced his party would slash VAT for hospitality to bring down the price of a pint of beer – and pay for it by bringing back the two-child benefit cap.
The plans have been slammed as ‘indefensible’ by poverty campaigners who backed Chancellor Rachel Reeves’ decision to scrap the cap at last year’s Budget.
Farage unveiled his proposals at a Westminster pub where beer tap labels had been replaced with Labour-mocking puns such as ‘Job Goblin’ and ‘Doomed Bar’.
He said: ‘What is happening to our pubs, what is happening to our hospitality sector, is little short of a disaster.
‘They’re on the edge of falling off a cliff – it’s serious, it’s very, very serious.’
Hospitality businesses would see VAT reduced to 10%, Farage said, with the cost of the move ‘fully funded’ by largely reinstating the Tories’ two-child cap.
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Under these plans, only households with two British parents who work full-time would be able to claim welfare on more than two children.
Single-parent families would be blocked no matter the work status of the parent, as would families where one or both parents are non-Brits.
Reform said this would cut the number of households receiving child benefits for their third child on from 510,000 now to just 3,700.
Farage and his MP Lee Anderson with the full set of pun beer taps (Picture: AP)
But Henry Parkes, principal economist at the left-leaning IPPR think tank, argued the cuts would be unlikely to cover the costs.
He said: ‘Pushing half a million children into poverty to fund a suite of hospitality tax cuts — cutting VAT, beer duty, business rates and national insurance — is indefensible.
‘It also just doesn’t add up – with these tax giveaways likely to cost far in excess of the savings from re-instating the two-child limit.’
Peter Matejic, Chief Analyst at poverty charity the Joseph Rowntree Foundation, said scrapping the two-child limit altogether was a ‘moral choice’ as it would boost health and education outcomes for two million kids who would be impacted by the end of this decade.
Mr Matejic said: ‘Scrapping the 2-child-limit for Universal Credit is by far the most efficient way of reducing child poverty and is a necessary part of any credible strategy to lower child poverty.
‘Investing in social security can also help the economy. Money spent on social security does not just evaporate, it is spent on the everyday essentials we all need.’
Farage previously expressed support for ending the two-child cap, telling a press conference in May last year he wanted to go ‘much further to encourage people to have children, to make it easier for them to have children’.
But he later backpedalled by suggesting this would only be the case for British working families.
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Previous Page Next PageHis announcement today was part of a five-point plan which he said would ‘save Britain’s pubs’.
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Farage also said he would reverse the employer National Insurance rise for hospitality businesses, cut beer duty by 10%, abolish business rates for pubs in a staggered way, and change regulations for landlords.
The move comes after Reeves unveiled her own plan to cut new business rates bills for pubs by 15% after strong backlash to her Budget from hospitality firms.
Many Labour MPs were banned from their local by landlords who feared a massive hike in rates after Covid-era support expired.
The Chancellor said her action would mean the pub sector as a whole will pay 8% less in business rates in 2029 than they do currently.
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