The Prime Minister faces the threat of his first Commons mutiny as Labour backbenchers gear up to force a vote on the two-child benefit cap.
Labour rebels hope to bounce Sir Keir Starmer into a concession over the benefit cap by pushing for a King’s Speech vote on the issue next week, with other opposition parties considering whether to back the move, i understands.
Statistics published by the Government on Thursday show that almost 1.6 million children across the UK are affected by the policy, which restricts the level of certain benefits a family can claim.
The figures prompted new Work and Pensions Secretary Liz Kendall to announce she would hold “critical meetings” with child poverty experts next week to begin “urgent” work on the Government’s promise of an “ambitious strategy to reduce child poverty”.
Pressed on whether the party could consider a concession of sorts, a senior Labour source said the party would be “setting out a full anti-child poverty strategy” and told i it is “a really important issue for us”.
The meetings next week are the start of what will be a cross-governmental strategy to deal with child poverty, and insiders said they did not want to rush the policy because they “want to get it right”.
However, under pressure to say whether Labour would back down on its refusal to scrap the cap, Environment Secretary Steve Reed said “strict spending controls” must be kept to despite “the difficulties families face”.
Labour backbenchers John McDonnell and Kim Johnson are drafting an amendment to the Kings Speech which, if chosen by the Speaker, could see the new Government facing its first Commons mutiny.
They are currently lobbying for support from Labour colleagues, but believe there could be movement from the front bench to neutralise the issue before a vote would take place.
Opposition parties indicated they are open to supporting such an amendment – or putting one forward themselves – which would increase the likelihood of a vote.
The Liberal Democrats indicated they would be open to uniting against the policy, but a source said no decision could be taken until the wording of amendments had been revealed.
The party’s work and pensions spokesperson Wendy Chamberlain said they “will keep campaigning to scrap it”.
Green Party sources said their MPs were “looking at every possible means to push the Labour Government to scrap this policy, including amendments tabled to the King’s Speech”.
MP Siân Berry said: “Lifting the two-child benefit cap is one of the most urgent and simplest things the new Labour government must do to take families out of poverty. Greens would scrap the cap immediately and we are making plans to work through every means we can and with anyone we can cross-party to push ministers to scrap this cruel policy.”
Ms Johnson, MP for Liverpool Riverside, told i her seat was “the most deprived in the country” with “nearly half of the children in my constituency now living in poverty.
“The families I represent just cannot wait any longer. Labour has a huge task to undo 14 years of Tory decay and will have to make difficult decisions about what to prioritise. But I would like to see lifting the two-child benefits cap a priority for the new Government as the single most cost effective and most impactful way to immediately alleviate child poverty in communities like mine across the country.
“This policy has broad brush support across the political spectrum and I am hopeful that the Labour Party will include this policy in the King’s Speech next week. I can think of no issue that is more urgent.”
Labour insiders on the left said they wanted to utilise the pressure over the issue off the back of the statistics published on Thursday by the Department for Work and Pensions.
The two-child benefit cap, introduced by Conservative chancellor George Osborne in 2017, restricts universal credit and child tax credit to a family’s first two children for most households.
The DWP figures show there were 1.6 million children living in households affected by the policy as of April this year, up from 1.5m last year.
There were 440,000 households in receipt of either universal credit or child tax credit who were not receiving the child element for at least one child because of the policy, up from 409,050 as of April 2023.
Of these, 52 per cent of children were in households with three children, 29 per cent in households with four children, and 19 per cent in households with five or more children.
The Resolution Foundation estimates that abolishing the two-child limit would cost the Government somewhere between £2.5 billion and £3.6bn in 2024/25.
After the latest figures, the think tank said almost two in five large families in the UK were now affected, and warned the impact would only widen.
Lalitha Try, an economist at the foundation, said there is “clear evidence of the financial losses that affected families are facing, and rising rates of poverty”.
She added: “Unless the policy is abolished, the majority of children in large families will fall below the poverty line by the end of the parliament. Any new child poverty strategy should find the funds to remove it.”
Action for Children said the figures “confirm the relentless expansion of this cruel policy, which creates and entrenches child poverty”, while Save the Children described the statistics as “an outrage” showing how “more and more children will suffer every year just because they have siblings”.
Last month, before becoming Prime Minister, Sir Keir said he would scrap the two-child limit “in an ideal world” but added that “we haven’t got the resources to do it at the moment”.
On Saturday, in his first press conference, he doubled down on his position and said he would not change his policy immediately after being elected.