Starmer warned child poverty will hit all-time high if two-child benefit cap not scrapped

Independent

26-02-2025

Sir Keir Starmer is facing a fresh backlash over the two-child benefit cap after a key economic think tank warned child poverty would hit an all-time high if it is not scrapped.
The prime minister has been urged to rethink the Conservative-era limit after the Resolution Foundation said his strategy to tackle child poverty would lack credibility if it remains in place.
Furious Labour MPs told The Independent the two-child limit was a ' critical issue ' for the government to address, branding it the biggest driver of rising child poverty.
Left-winger Kim Johnson said: 'Real change requires policies that lift children out of poverty, not ones that entrench hardship. Scrapping the two-child limit must be a priority if the government is serious about tackling child poverty.'
And Nadia Whittome added: 'These findings come as little surprise, with child poverty researchers and campaigners long arguing that the two-child limit is the biggest driver of rising child poverty. It is essential that the government's child poverty strategy includes its abolition.'
'Anything less will not suffice,' she warned.
The fresh calls came after Sir Keir said he had found an additional £13.4bn in annual spending to boost the size of Britain's defence budget to 2.5 per cent of GDP, in a bid to placate Donald Trump and ward off 'tyrants' like Vladimir Putin.
The two-child benefit cap, imposed by Tory former chancellor George Osborne, prevents parents from claiming benefits for any third or subsequent child born after April 2017. A separate limit on benefits, imposed under the Tory- Liberal Democrat coalition in 2013, restricts how much a household can receive in benefits in total.
The Resolution Foundation said increasing the two-child cap to three children could reduce child poverty by 320,000 by the next general election, costing £3.2bn per year by 2030.
It said this would be 'preferable' to the current system, but that benefits should be allocated in line with need, which would require fully scrapping the two-child limit at a cost of around £4.5bn.
Taken together with other measures such as extending free school meals to all families on universal credit and ensuring local housing allowance is linked to rents, it estimated a total cost of around £9bn and some 740,000 fewer children in relative poverty in 2029-30.
Sir Keir's child poverty taskforce is due to present a strategy in spring but the left-leaning think tank's report warned the current two-child limit is 'incompatible with a credible' plan.
The PM has previously said he wants to scrap the cap but that the government cannot currently afford to, repeatedly stressing his focus on growing the economy.
But the Resolution Foundation warned that, under current spending plans, child poverty could rise to 33 per cent by the end of the decade, equating to 4.6 million children living in poverty.
Researchers said it is time to move on from 'warm words' and start cutting child poverty.
Adam Corlett, principal economist at the Resolution Foundation, said: 'With a record 4.6 million children set to fall below the poverty line by the end of this parliament, the government is right to be formulating a new strategy to combat this scourge of modern Britain.
'However, a credible new strategy will need more than warm words. A government that is serious about reducing child poverty will need to undo some of the policies announced by previous governments, such as scrapping the two-child limit. The upcoming spending review should also look to extend free school meals to more families.
'An ambitious strategy could support around 900,000 children out of poverty by the end of the decade. And while the cost of this action may seem daunting, the cost of inaction is far greater and could leave the government with an embarrassing record of rising child poverty.'
Former shadow chancellor John McDonnell, who has sat as an independent MP since having the whip suspended by Labour in a rebellion over the two-child limit, told The Independent: 'No Labour government in history has stood by and allowed child poverty to increase on its watch.
'Labour ministers must realise that in the eyes of its supporters, the credibility of this government as a force for progress stands or falls on this critical issue.'
Backbench MP Rachel Maskell added: 'It is welcome to learn that the government's plans could lift children out of poverty but, as academic research consistently shows, the biggest single intervention to reduce child poverty will be to remove the limit on the number of children to receive child benefit, and to end the benefit cap.
'Labour has a heavy responsibility to end child poverty and to ensure that every child has the very best start in life.'