Will Keir Starmer cave to pressure on the two-child benefit cap?

Keir Starmer’s MPs have a taste for rebellion and will seek to pile pressure on the prime minister to scrap the two-child benefit cap, argues Archie Mitchell

Keir Starmer’s first big showdown with the Labour left in government came as a group of rebels voted for a King’s Speech amendment calling for the two-child benefit cap to be scrapped.

The ruthless prime minister, with the confidence of a man who had just led Labour to a landslide election win, suspended seven of his own MPs.

Starmer wanted to instil fear in those who might not be on board with his agenda in the future that rebellion would have consequences.

Starmer will come under pressure over the two-child limit (PA)

But a year on, Starmer is weakened. Labour MPs are emboldened after forcing their leader’s hand over his controversial welfare cuts, and the two-child cap on benefits is likely to be next.

Implemented by austerity architect George Osborne, the limit, which restricts parents from claiming certain benefits for more than two of their children, is hated across the Labour Party. Critics say the cap punishes children, with experts predicting 470,000 could be lifted from poverty if Starmer scrapped it.

But how likely is it that the prime minister will give in to pressure and axe the cap?

Bridget Phillipson on Sunday warned that future spending commitments – including on Labour’s child poverty plans – had been made harder by the £5bn U-turn on welfare.

The education secretary said spending decisions had been made harder by the welfare U-turn (PA)

The education secretary said ministers are “looking at every lever and we’ll continue to look at every lever to lift children out of poverty”.

But, pushed on whether a change to the two-child cap was now less likely, Phillipson said: “The decisions that have been taken in the last week do make decisions, future decisions harder.”

Alternatives to scrapping the cap entirely, such as lifting it to a three-child cap, are also believed to have been floated in government.

The Resolution Foundation has said increasing the two-child cap to three children could reduce child poverty by 320,000 by the next general election, costing £3.2bn per year by 2030.

It said this would be “preferable” to the current system, but that benefits should be allocated in line with need, which would require fully scrapping the two-child limit at a cost of around £4.5bn.

The chancellor is already braced for tax hikes in the autumn Budget, having warned the cabinet last week they could be more painful than last year’s punishing increases.

And any move to scrap or alter the two-child limit would need to be paid for by more tax increases or spending cuts elsewhere.

Downing Street figures have been pointing rebels demanding a change to the welfare U-turn they forced, arguing the £5bn cost of that has derailed any plans to scrap the benefit cap.

But the argument has already sparked anger among left-wing MPs, with Labour’s Jon Trickett saying: “The suggestion that the Labour government will leave children in poverty because they couldn’t take welfare benefits from the disabled is truly shocking.”

Phillipson and work and pensions secretary Liz Kendall are currently leading a Child Poverty Taskforce, which was due to report in the spring, but has been delayed to this autumn to coincide with the Budget.

The taskforce is looking at “all the available levers we have across government” to deliver the “ambitious” child poverty strategy promised in Labour’s manifesto.

Senior Labour figures have also reportedly warned that tax hikes are on the horizon after the benefits climbdown, with the chance of a change in the controversial cap looking increasingly remote.

“My assessment is that is now dead in the water,” a No 10 source told The Sunday Times.

Even Starmer, who previously let it be known that he wanted to scrap the cap, ordering the Treasury to find a way to fund the plan, dampened expectations of a change last week.

He said: “I personally don’t think there is a silver bullet… we have got to look at a range of things.”

As long as Starmer is prime minister, he will face round after round of calls for the two-child cap to be scrapped. The question is, will he give in?