Labour leaves door open for potential U-turn on two-child benefit cap

Prime Minister Sir Keir Starmer has this week given his strongest indication of a possible softening position on the lifting of the two-child benefit cap, opening the door for a potential announcement at the Budget later this year.  

Speaking on Sky News, Education Secretary Bridget Phillipson agreed that removing the cap was among a number of measures that the government would review as part of its newly launched Child Poverty Strategy. Describing lifting the cap as ‘one of a number of levers in terms of how we lift children out of poverty’, Phillipson’s comments were swiftly supported by Starmer and provide the clearest indication to date that the party’s position on the matter is shifting.  

Thus far the government has resisted calls to lift the cap, citing the Chancellor’s fiscal rules and insistence that the economic conditions of the day are not right to make the estimated £3.4bn annual commitment.  

There are a number of key political dynamics at play within this debate which make the government’s actions all the more intriguing. The government’s insistence on maintaining the cap has pulled together an unlikely coalition in opposition, including a number of Labour, SNP, Lib Dem and some Conservatives including potential leadership contender Suella Braverman.    

In the short term, this softening of the government’s position may help to ward off some of those would-be rebels on the backbenches supporting amendments to the King’s Speech. In truth this is a government with an enormous majority, with Parliamentary arithmetic meaning that there is no remote threat to the government’s majority, but headlines about unease within the Labour Party already will be something that Number 10 is keen to avoid at this early stage.  

The other dynamics at play, as ever, are the internal politics of the Labour Party. Rightly or wrongly, this is a debate which will be viewed through the lens of left vs right within the party, with many of those voices most critical of the government’s position firmly on the party’s left. Given how much of Starmer’s time as leader has been spent limiting the left’s influence within the party, the Prime Minister will no doubt be keen to continue this streak and show where party truly lies within Labour.  

So where does that leave us in the longer term? Short of consulting my crystal ball, we know that issues such as child poverty and social mobility remain key driving factors for this mission-led government. Come the end of this Parliament, this government’s ability to address these issues of social justice will no doubt influence how successful it is judged to have been.  

What this softening of the position does do, however, is leave the door open for a full revision of the party’s position later in the year, when the Chancellor may be able point to a more positive economic outlook as justification for lifting the cap. In any case, expect this issue to rear its head again and again as we get closer to the Budget in Autumn.