The Government is facing threats of a wider rebellion over the two-child benefit cap if its long-promised strategy to reduce poverty does not include a clear plan to scrap it.
MPs who kept quiet about the Government’s refusal to scrap the benefit limit after the election will challenge ministers if they do not make a U-turn on the decision in the child poverty strategy, The i Paper understands.
Multiple Labour MPs and insiders said that support for scrapping the cap entirely is widespread and an issue that unites different groups within the parliamentary party.
And they pushed back against suggestions a compromise policy, such as increasing the cap to cover three children, would satisfy MPs – arguing that if the Government attempted to do so they could face a much bigger challenge.
The benefit limit prevents parents who are claiming universal credit from receiving additional welfare support for more than two children.
Seven MPs were suspended from Labour in the summer of 2024 after voting against the King’s Speech in a rebellion over the decision to keep the two-child cap. Four have since had the whip restored.
Labour insiders said there were many more MPs, who chose not to rebel because they believed the child poverty taskforce would recommend scrapping the cap, who would prepared to go against the Government this time around.
Forty Labour MPs abstained on the vote at the time. Sources said many MPs who did not want to vote down the first Labour King’s Speech in more than a decade were frustrated at the lack of movement on the issue.
One MP told The i Paper that “a lot of MPs” want to see the end of the cap and are “very concerned by the levels of child poverty”.
“A lot of MPs did not vote against this measure in the King’s Speech because they wanted the Child Poverty Task Group to do its work in recognising how to maximise taking children out of poverty. Without removing the cap, Government will not meet its objectives,” the MP said.
Another source said there is a “huge amount of discontent and frustration” among MPs who feel they have not been given adequate reassurances on the Government’s plan to tackle inequality or poverty.
“We still don’t have a publication date for the child poverty strategy, but I think if the two-child cap is not lifted, or if they attempt a fudge, there will definitely be trouble,” they said.
“There is a lot of fear among MPs after the seven had the whip removed, but with Reform on our heels lots are going to start looking to the next election and what they need to do to win their seats again.”
The ministerial taskforce looking at how to alleviate child poverty is due to set out the Government’s strategy in spring.
No specific date for its publication has been set and MPs have not been promised a vote on the plan.
Earlier this week, Politico reported that some MPs believed increasing the cap could be a compromise position.
But this was labelled “ridiculous” by a Labour source who suggested any attempt from the Government to fudge the policy would go down very badly.
The cap has been linked to higher rates of child poverty in families with three or more children by a range of experts.
Removing it would cost up to £3.5bn and the Chancellor Rachel Reeves, alongside Prime Minister Sir Keir Starmer, have argued the public finances do not allow for doing so.
Instead, the Government launched the taskforce to inform its long-promised child poverty strategy.
It has not ruled out considering changes to the cap, and other forms of welfare, to alleviate poverty.
But the taskforce is also looking at other ways to support families, including bringing down the cost of essentials, helping parents into better-paid work and improving the role of public services.
A recent report by anti-poverty charity the Joseph Rowntree Foundation (JRF) warned pushing for economic growth – the Government’s flagship policy – was not enough to alleviate poverty for families now.
It said analysis of Office for Budget Responsibility and Bank of England forecasts revealed levels of poverty and deep poverty will remain “broadly” flat for the next four years “without additional action from the Government”.
The latest official statistics, from 2024, showed the estimated total number of people in relative low income in the UK was at 14.35m in the year to March 2023, with some 4.33m of those being children.
The figure for children was the highest since comparable records for the UK began in 2002/03 and equates to three in every 10 children being in poverty.
A DWP spokesperson said:“We do not comment on speculation. Our Ministerial Taskforce is exploring all available levers across Government to give every child the best start in life as part of our Plan for Change.
“As we fix the foundations of the economy, we’re increasing the living wage, uprating benefits and supporting 700,000 of the poorest families with children by introducing a fair repayment rate on universal credit deductions to help low-income households and make everyone better off.”
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