Scrapping two-child benefit cap will be Rachel Reeves first fight with new MPs
Sir Keir Starmer and shadow chancellor Rachel Reeves will face immediate pressure to scrap the two-child benefit cap should Labour win the general election, with poverty activists calling it an âearly litmus testâ for the party in government.
The policy, introduced by Tory chancellor George Osborne in 2017, restricts child benefit and Universal Credit to the first two children. It is widely disliked within Labour and the issue has become a rallying point for the left.
Charities stress their âtotal agreementâ that ditching the measure is the most effective route to lifting families out of levels of poverty, while trade unions, a number of senior Labour figures, including Scotlandâs Anas Sarwar, and activists have said they oppose it.
But Starmer and his shadow chancellor Rachel Reeves have so far stuck to the partyâs tough stance on fiscal discipline and refused to specifically back the policy in the Labour manifesto.
The document instead pledges a review of Universal Credit and promises to âend mass dependence on emergency food parcelsâ.
Starmer has said he is ânot immuneâ to the powerful case for scrapping the cap, but is expected to face calls to go further should Labour win.
Some Labour insiders view scrapping the policy as totemic and want Reeves to commit to removing it during the first budget or even send a signal as early as at the partyâs conference in September, if there are further signs of economic recovery.
One Labour candidate told i that if elected they would join any push in parliament for lifting the cap to be part of Reevesâs first budget.
âI think it will be a battle,â they said. âLabour governments have a history of eradicating child poverty and we have said this one will be no different, but this cap is one of the biggest drivers of child poverty in this country. If it isnât scrapped ours and any child poverty strategy wonât be as effective.â
Others, however, believe Reeves risks damaging trust if Labour fails to govern in the way it campaigned.
Another candidate likely to be elected next month said they expected Labourâs push for economic growth to be put first.
âI think a small but vocal campaign group within Labour choosing a fight with a new government will make themselves a target and lose the battle,â they said. âFor those of us that want to cut poverty and see families better off, we will allow Labour measures to take effect and respect the manner in which the election was fought.â
Neal Lawson, director of the left-leaning think tank Compass, said: âRight now, little is deemed feasible given Labourâs narrow, win-at-all-costs strategy. This approach looks likely to put Labour in government after July 4th, but leaves too little room for radicalism afterwards.â
He said the safety-first âsmall targetâ election campaign should not build âan iron cage from its own victoryâ.
âIf Labour wins, as now looks almost inevitable, Starmer will rightly come under intense pressure from within the party to scrap the two-child benefit cap. Any decision on this will be a key early litmus test â if this doesnât change, what will?â
The sharp nature of the current cost of living crisis means pressure to act early could come from Labour mayors, such as the North Eastâs Kim McGuinness, who pledged to reduce child poverty during her time in office, and Greater Manchesterâs Andy Burnham, albeit behind-closed-doors.
But more publicly Labour will face pressure from Ed Daveyâs Lib Dems, who are likely to grow their number of MPs, and the SNP who will be gearing up for the 2026 Holyrood elections. Even some Conservatives, such as Suella Braverman, have said the limit should be lifted.
Meanwhile, charities and think tanks are preparing to lobby Reeves and Starmer.
Katie Schmuecker, principle policy adviser at the Joseph Rowntree Foundation, said tackling child poverty early in someoneâs life eased the burden on the state later
âShould Labour win, they wonât want child poverty continuing to rise on their watch, or a continuation of the deepening poverty weâve seen over the last 20 years,â she said.
âOne million children experienced destitution in a single year and over a million children received a Trussell Trust food parcel last year. If we continue to see examples of children experiencing hunger and hardship the pressure to act will be immense.â
She added that though the manifesto contained âimportant commitmentsâ on child poverty Labour âwill need to move urgently to action given the depth of hardship families are facingâ.
âFailure to act quickly would not only be morally wrong, it would undermine Labourâs ability to deliver its missions in government, as hardship places additional pressure on schools and health services, as they have to deal with the consequences of people going without essentials.â
Dan Paskins, interim executive director of policy, advocacy and campaigns at Save the Children UK, said there is âno serious caseâ for waiting to take action.
He said: âA strong economy with a focus on growth does not have 4.3 million children living in poverty.
âThere is now total agreement amongst charities, independent experts and largely across the political spectrum that this policy must go and this needs to happen immediately. There is no serious case for waiting for a different economic picture.
âThe next Government should consider how lifting the cap immediately eases financial pressure on 422,000 households, therefore freeing up money to spend in local communities and support local jobs.â
Ealier this week on a campaign visit to Southampton the Labour leader said he was not âimmuneâ to the arguments over the cap, but reiterated his position that the party in government would not be able to afford to scrap it straight away.
He said it was a âtough decisionâ but said âweâre not going to make commitments that are unfundedâ, referring back to decisions made by Liz Truss.
He added: âWeâll drive child poverty down, but Iâm not going to make commitments that we canât fund because of the damage thatâs been done to the economy.â
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