‘Fiscal Conservative’ Keir Starmer faces Labour backlash over refusal to scrap child benefits cap
Sir Keir Starmer faces a looming Labour row over his insistence that the party will not scrap the two-child benefits cap, with MPs in his party describing the move as “unthinkable”.
The Opposition leader doubled down on his pledge to prioritise economic growth over spending if he enters No 10, insisting Labour will be the party of “financial responsibility”.
Sir Keir also said that he was happy to be labelled a “fiscal conservative”, as he repeatedly refused to commit to greater spending on the NHS and other public services.
“I don’t mind what label people put on me. I do want to make my argument. My argument is this: what was absolutely plain from last year’s mini-Budget is if you lose control of the economy it’s working people who pay,” he told the BBC’s Sunday With Laura Kuenssberg.
Asked whether he would ditch the cap, which was drawn up by former Tory chancellor George Osborne during the austerity years, Sir Keir said: “We’re not changing that policy.”
But senior Labour MPs warned that defending the policy would become “increasingly hard” and suggested they were willing to challenge Sir Keir over the move in the run-up to the general election.
The two-child limit bars parents from claiming child tax credit or universal credit for any third or subsequent child born after April 2017.
It was designed to reduce public spending and encourage families to make decisions based on their financial circumstances, but has been criticised for penalising larger families and driving up child poverty rates.
i understands that members of the Shadow Cabinet have expressed their concerns over the two-child limit directly to Sir Keir, but that Labour is keeping a tight lid on spending pledges ahead of the next general election, expected in late 2024.
Shadow Work and Pensions Secretary Jonathan Ashworth said last month that the cap was a “vicious policy” that is “absolutely keeping children in poverty”.
He told the Daily Mirror: “The idea that this policy helps move people into work is completely offensive nonsense. We are very, very aware that this is one of the single most heinous elements of the system which is pushing children and families into poverty today.”
Veteran Labour MP Stephen Timms, who chairs the Commons Work and Pensions Committee, said the two-child limit should go.
He told i: “The case for the two-child limit is not a strong one, and I have been interested to see Conservative MPs start to question the falling birth rate in this country.
“The limit as it currently stands only really makes sense if you think that families should not have more than two children, which I don’t think people do think. As time goes on, the case for the two-child limit will be increasingly hard to make.”
Kim Johnson, Labour MP for Liverpool Riverside and a member of the Education Select Committee, urged Sir Keir “to be just as bold” as former leader Sir Tony Blair in efforts to reduce child poverty.
“We are suffering a major crisis of childhood poverty [and] increasing levels of Victorian diseases,” she told i.
“Labour has always been the party of working people, yet workers aren’t being paid enough to support or feed their families. In 1997, Tony Blair was bold with a financial package to tackle child poverty, [which included] the Sure Start scheme, children’s centres and an increase in affordable, flexible childcare.
“With four million children living in poverty, including in work poverty, we need to be just as bold to lift future generations out of poverty.
“[The] consequences of doing nothing are unthinkable.”
Commenting on Sir Keir’s confirmation that Labour will not ditch the policy, left-wing grassroots group Momentum wrote on Twitter: “As Jonathan Ashworth said, this is a heinous policy. The Labour movement is united behind scrapping it.”
Scotland’s First Minister Humza Yousaf tweeted: “Why on earth is Starmer committed to keeping this cruel Tory policy?”
Sir Keir said that the last Labour government “grew the economy and had tens of billions of pounds more to spend on our public services. That’s what I want to replicate… but that has to start with responsible economics and it has to be coupled with reform.”
The Opposition leader is understood to want a Labour government to follow the Tories’ blueprint for tax and public spending until Britain’s ailing economy returns to growth.
But the move has stoked anger from the left of the party. Andrew Fisher, Jeremy Corbyn’s policy chief, said it was “delusional” to refuse to commit to extra spending on the NHS and public services.
Unions have also called for Labour to commit to further spending pledges, warning that they could restrict funding unless Sir Keir announces a bolder vision than just “tinkering around the edges”.
Sharon Graham, head of the UK’s second-largest union Unite said she was “very, very disappointed with the lack of ambition” under Sir Keir’s leadership and that there would be “no blank cheques” without the party spelling out bolder policy pledges. Unite is Labour’s biggest union donor and guarantees the party almost £1.5m a year.
Last week, Rachel Reeves, the Shadow Chancellor, said that the party must not make financial promises that it cannot keep in the current economic climate“.
Tensions about Labour’s approach to spending are likely to come to a head next weekend, when party officials will meet unions, MPs and affiliated groups at its National Policy Forum in Nottingham.
