Sir Keir Starmer is under mounting pressure to scrap the two-child benefit cap after his child poverty taskforce is set to recommend the move.
The prime minister established a group of ministers and officials to look at how to bring down child poverty, with its recommendations due before Rachel Reeves’s Budget on 26 November.
The much-delayed recommendations, however, are set to include the prime minister being told that scrapping the benefit cap is the most effective way to lift children out of poverty and that he must pursue the move.
According to The Times, the taskforce has drawn up the main planks of a child poverty strategy, with lifting the two-child limit the top recommendation.
And Dame Meg Hillier, chair of parliament’s Treasury committee, said it would be “unconscionable” if Labour failed to alleviate child poverty, pointing to scrapping the two-child cap as the most effective measure.
Speaking to BBC Radio 4’s Today programme, the senior Labour MP said: “I’ve been looking at it in detail, and I’m convinced that the quickest and easiest way to lift 350,000 children out of poverty and 700,000 children out of deep poverty, would be to really pick up the cap.”
She pointed to the last Labour government’s record on child poverty, adding: “It was unconscionable to me and many colleagues and people I know up and down the country, particularly in my constituency, to think that we’re not going to be investing in our children.”
She said: “Whatever the moral and ethical reasons about the children who are sharing shoes and clothes to go to school and taking alternate visits to playing football because they’ve only got one pair of boots to share, that sort of thing … Actually, there’s also hard facts and figures about why we need to invest in our young people.”
Asked whether she believes the measure will be in the chancellor’s Budget, Dame Meg said: “I would hope so.”
She backed calls from former prime minister Gordon Brown to introduce reforms to gambling taxes in order to generate the £3.2bn needed to scrap the cap.
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.
It has become one of the most contentious issues for Labour MPs since the general election, with many shocked that the prime minister has still not scrapped it after more than a year in power.
But renewed pressure to scrap it comes as Ms Reeves is already scrambling to find tens of billions of pounds in tax hikes in November’s Budget.
At a cost of around £3bn per year by the end of the decade, scrapping the two-child cap will force the chancellor into even more difficult choices when she sets out her fiscal plans.
The issue is coming to a head days before Labour’s annual conference in Liverpool, at which it is set to be a key focus of activists and MPs.
Greater Manchester mayor Andy Burnham, who has been at the centre of speculation that he is plotting to challenge Sir Keir as Labour leader, has called for the cap to be scrapped.
Deputy leadership frontrunner Lucy Powell has backed Mr Brown’s proposal calling for the cap to be axed, while her rival Bridget Phillipson said scrapping the cap is “on the table”.
