Starmer is under pressure (Image: Getty)
Prime Minister Sir Keir Starmer is facing calls from within his own party to scrap the two-child benefit cap. The cap means parents can currently only claim the child tax credit and universal credit for their first two children.
But, with birth rates declining and child poverty still a major issue, some are urging the Prime Minister to change tack and lift the cap. Speaking to the i newspaper, one Cabinet minister said the cap being lifted would be costly but added: “There is also a significant cost in other ways, of a Labour government not taking action to bring down child poverty. And we have to be able to go into the next election having made significant progress on child poverty.
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Reeves could lose her fiscal headroom (Image: Getty)
“Whilst it’s hard and the cost is high, it’s clear that it is an effective way of supporting families and making sure that fewer children grow up in poverty. And the evidence supports that,”
Rachael Maskell, Labour MP for York Central, said: “It is imperative that the Government scrap the two child limit and the benefit cap as this will lift 360,000 children out of poverty, but most of all, this will give these children a life of better opportunities, including to their health and wellbeing.”
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Another Labour MP said: “It definitely needs to go. We cannot seek to trade off poor children against poor disabled people or poor pensioners. We need to have a mission to tackle all poverty. End of.”
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The demands come after Labour rebels forced the Government to drastically water down its welfare reforms, aimed at saving the exchequer ￡5 billion, earlier this week.
Lifting the child benefit cap would reportedly cost Chancellor Rachel Reeves ￡3.5 billion, bringing the total spending from welfare policies to ￡9.75 billion.
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This could almost completely Ms Reeves's ￡9.9 billion fiscal headroom.
As a result of the welfare U-turn, the Chancellor has now refused to rule out more tax rises in the future.
Branding the failure of Labour's welfare reforms "damaging", she added there would be “costs to what happened."