Labour MPs are planning a fresh push at the autumn Budget to axe the two-child benefit limit after Sir Keir Starmer suspended seven backbenchers who rebelled against the Government on the issue.
Two London MPs, former shadow chancellor John McDonnell and Apsana Begum, were among the Labour backbenchers who voted for a Scottish National Party motion, during a King’s Speech debate, to scrap the benefits restriction.
They were stripped of the parliamentary whip as Sir Keir imposed his authority on the party in the early days of the Labour government.
Poplar and Limehouse MP Ms Begum tweeted: “I voted against the two-child benefit cap which has contributed to rising and deepening levels of child poverty and food insecurity for many East End families.”
The policy affects children and families across the country.
Economists expect the UK’s growth prospects to be revised up if there is stable government in Britain, after the turmoil of previous Tory administrations, and this may give Chancellor Rachel Reeves the leeway to abandon the benefit limit.
Ahead of Sir Keir’s first Prime Minister’s Questions, Labour MPs made clear they will make fresh efforts later this year to remove the cap.
South Shields Labour MP Emma Lewell-Buck said: “There will be an Autumn Budget soon and I know myself and other colleagues will be working constructively with the Government to make scrapping the cap part of it.”
The other five MPs suspended from the parliamentary Labour party are ex-business secretary Rebecca Long-Bailey, Richard Burgon, Ian Byrne, Imran Hussain and Zarah Sultana.
Bell Ribeiro-Addy, Labour MP for Clapham and Brixton Hill, said: Removing the two-child benefit cap is the most cost-effective and immediate way for our Government to lift 300,000 children out of poverty.”
MPs voted 363 to 103 to reject the amendment tabled by SNP Westminster leader Stephen Flynn.
More than 40 Labour MPs recorded no vote.
Ahead of the vote, Sir Keir said there is “no silver bullet” to end child poverty but acknowledged the “passion” of MPs opposing the continuation of the Tory measure.
The cap, introduced by the Conservatives in 2017, prevents parents claiming Universal Credit or child tax credits for a third child, except in very limited circumstances.
There were 1.6 million children living in households affected by the policy as of April this year, up from 1.5 million to April 2023, according to recent figures from the Department for Work and Pensions.
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 are in households with five or more children.
The figures showed there were some 440,000 households in receipt of either Universal Credit or Child Tax Credit who were not receiving the child element or amount for at least one child because of the cap policy, up from 409,050 as of April 2023.
The Resolution Foundation has calculated that abolishing the two-child limit would cost the Government somewhere between £2.5 billion and £3.6 billion in 2024/25 but said such costs are “low compared to the harm that the policy causes”.
In its briefing in January, it said scrapping the two child limit “would be one of the most efficient ways to drive down child poverty rates”, estimating that if abolished at that point, 490,000 children would have been lifted out of poverty.
