Keir Starmer hits back at Labour critics of child benefit U-turn

‘Talk of no money left is the economics of the kindergarten’ says economist

Archie Mitchell,Adam Forrest
Tuesday 18 July 2023 21:08 BST
Sir Keir Starmer on Sunday confirmed he would retain the Tories’ two-child benefit limit
Sir Keir Starmer on Sunday confirmed he would retain the Tories’ two-child benefit limit (PA)

Sir Keir Starmer has hit back at critics of his plan to uphold the Tories’ two-child benefit cap.

The Labour leader suggested there were some within his party who agreed with the need to make “tough decisions”.

In a conversation with Sir Tony Blair at the Future of Britain conference, Sir Keir said: “My first reaction is we keep saying collectively as a party that we have to make tough decisions.

“And in the abstract, everyone says, ‘That’s right Keir’. But then we get into the tough decision – we’ve been in one of those for the last few days – and they say, ‘we don’t like that, can we just not make that one, I’m sure there is another tough decision somewhere else we can make’. But we have to take the tough decisions.”

He later said the party has had to be “really ruthless” since he took the reins to ensure it was in a good place to contest the next election.

His comments came as Labour was slammed for practising “playground economics” after shadow minister Lucy Powell claimed there was “no money left” to reverse Tory policies.

Ms Powell, the shadow culture secretary, said Labour may have to keep “lots of bad policies” from the Tories if it wins the general election. She insisted there is “no money left” and accused the Conservatives of “tanking the economy”.

But a former Bank of England economist Tony Yates said the claim was “false” and would have a “corroding effect on politics”.

And Jonathan Portes, professor of economics and public policy at King’s College London, said the claim was “laughable”.

“This is an absurd way of talking about policymaking,” he told The Independent. “Talking about there being no money left is the economics of the kindergarten.”

Sir Keir told the conference that Liz Truss had “proved the thesis” that if you make unfunded tax cuts, the economy is damaged.

“And working people pay the price,” he said. He added: “I will not let the next Labour government get anywhere near the level of what Liz Truss did.”

The interventions came amid a furious backlash against The Labour leader over his plan to uphold the Tories’ two-child benefit cap, which exposed a massive rift in the party ahead of crucial by-elections.

Anas Sarwar has said Scottish Labour is opposed to the two-child benefit cap
Anas Sarwar has said Scottish Labour is opposed to the two-child benefit cap (PA Wire)

The phrase ”Sir Kid Starver” began trending on Twitter and four Labour mayors, including London’s Sadiq Khan, opposed the decision alongside Scottish Labour leader Anas Sarwar.

Mr Portes said reversing the two-child cap, which would cost the Treasury £1.3bn, would have “long-term benefits” that would outweigh the cost. And he pointed out that it would cost less than the government’s recently announced multi-billion pound tax break on pensions.

“Children should not be poor and we should not be punishing them for being born late in their families,” he said.

The policy, introduced by austerity architect George Osborne, prevents parents from claiming benefits for any third or subsequent child born after April 2017.

Mr Portes said the financial picture has deteriorated since 2010, adding that it is “true you have to worry about the medium and long-term fiscal constraints more than in 2010”.

“It’s not stupid to talk about how to finance something,” he added.

But he said: “The idea we do not have money to spend around £1bn to help hundreds of thousands of kids living in deprivation ... is ridiculous and no serious economist would support that, regardless of ideology.”

Backbench Labour MP Stella Creasy also weighed into the row, saying the policy forced women to declare they are victims of rape to get money and also does not take into account that a family might have twins.

“We can all see in our communities that it is pushing up child poverty, the evidence shows us that,” she added.

Former Labour leader Jeremy Corbyn also attacked Sir Keir over the policy, claiming MPs are “seething with anger”.

“Even the Blair government, which Keir Starmer often quotes, did do a great deal to lift children out of poverty by not having a two-child policy,” he said.

The row is set to explode again at Labour’s National Policy Forum meeting this weekend, where party figures will meet in Nottingham to form a programme ahead of next year’s general election.

Sir Keir has so far shown no sign he will back down. A Labour source told The Independent: “There are a range of things we might otherwise like to do but won’t be able to afford because the Tories have lost control of the public finances.”

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