A Tory-linked think tank has called for the two-child benefit limit to be axed and warned it pushes kids into poverty.
In a report likely to pile fresh pressure on Keir Starmer over the austerity-era policy, Onward said it “sends a harmful signal that the government does not value children”.
The centre-right think tank, which has close ties to the Conservative Party and boasts Tory MPs on its advisory board, states: “The government should end the two-child benefit cap.” It comes after Mr Starmer suspended seven left-wing Labour MPs after suffering the first revolt of his premiership over the policy last month.
The two-child benefit limit – first announced by ex-Tory Chancellor George Osborne in 2015 – impacts almost 1.6million children, according to the latest figures. It is estimated scrapping the measure – a move costing around £2.5billion in the current financial year – would lift hundreds of thousands out of poverty.
Onward’s report published today said the policy, which restricts Universal Credit and Child Tax Credits to the first two children, “increases children’s risk of being in poverty”.
It added: “In 2022/23, 4.3 million children were in relative low income after housing costs, the highest level of child poverty after housing costs in 30 years.
“The cap also sends a harmful signal that the government does not value children, both as individuals and as crucial contributions to our future. This is not only wrong but counterproductive in an ageing society.”
Mr Starmer last month launched a child poverty taskforce in an attempt to placate rebels ahead of a Commons vote on the issue. The PM has so far resisted calls to axe the policy, saying he will not make unfunded commitments, but endorsed comments from the Education Secretary Bridget Phillipson.
She signalled a shift in the Government’s position in July, saying ministers would “consider” lifting the cap as “one of a number of levers of how we make sure we lift children out of poverty”.
Mr Starmer said at the time: “What the Education Secretary said this morning I agree with, which is she’s passionate about tackling poverty and child poverty in particular. She spoke very powerfully this morning, because she speaks as a woman who grew up in poverty, everybody who knows her background knows how hard it was for her.
“So that’s why I’m very pleased that she’s one of the chairs of our taskforce on tackling child poverty, and we will make sure that the strategy covers all the bases to drive down child poverty.
“No child should grow up in poverty. The last Labour government did a huge amount of work on this with a very good strategy. I intend that we will do the same with the same commitment and passion.”
A Government spokesman said today: “No child should be in poverty – that’s why our new cross-government taskforce will develop an ambitious strategy to tackle the crisis. Alongside this urgent work, we will roll out free breakfast clubs in all primary schools while we grow the economy and make work pay for hardworking families in every part of the country.”