Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Sir Keir Starmer suspended seven Labour MPs on Tuesday after they supported a parliamentary move calling for the abolition of the UK’s two- child benefit cap.
A Labour official said the seven MPs, including the former shadow chancellor John McDonnell, had been suspended for six months.
The MPs, drawn from the party’s leftwing, supported a Scottish National party amendment to the prime minister’s first King’s Speech calling for the two-child benefit cap to be scrapped.
Many Labour MPs are opposed to the cap because of concerns that it is fuelling child poverty — deputy prime minister Angela Rayner called the policy “obscene” while the party was in opposition.
But Starmer refused to commit before the general election to scrapping the cap, because he wanted to convince voters that Labour was serious about responsible public spending.
The cap stops most parents claiming additional child-related welfare payments if they have more than two children.
The SNP amendment was rejected by 363 votes to 103 in the House of Commons on Tuesday evening — reflecting how Labour has a large majority.
But the vote was the first big test of Starmer’s authority, and his response suggested he is determined to crack down on dissent.
Starmer on Monday raised the prospect of axing the two-child benefit cap, saying he agreed with his education secretary Bridget Phillipson, who stated ministers would consider scrapping it “as one of a number of levers” in Labour’s strategy to reduce child poverty.
Liz Kendall, work and pensions secretary, on Tuesday said the government needed to do the sums on lifting the cap.
Kendall and Phillipson are co-chairs of a task force appointed by Starmer to develop the government’s child poverty strategy.
Downing Street said the state of public finances did not prevent action on child poverty.
The two-child benefit cap affected 1.6mn children in the year to April 2024, up from 1.5mn in the previous 12 months, according to data from the Department for Work and Pensions.
Removing the cap would cost £3.4bn a year but would lift about 500,000 children out of relative poverty, the Institute for Fiscal Studies, a think-tank, has said.
Paul Johnson, director of the IFS, has estimated the cap would affect a further 670,000 children by the end of the parliament.
The cap was introduced by the previous Conservative government in April 2017, which said it would force families living on benefits to face the “same financial choices” as working households.
About 4.3mn children were living in relative poverty in 2022-23, up from 3.6mn in 2010-11, according to the Department for Work and Pensions.
The poverty line is defined by the government as 60 per cent of median household income.