Next week will see Labour’s first King’s Speech since Clement Attlee was Prime Minister and George VI the King. If The Guardian is to be believed, it will contain “at least” 30 bills, including legislation to enable automatic voter registration, boost housebuilding, and devolve powers to mayors and local councils.
It might also see the first major backbench rebellion of Keir Starmer’s new premiership. Kim Johnson, a Labour MP, plans to table an amendment calling for the two-child benefit cap to be lifted. She described the policy as “cruel” and as “pushing struggling families into further poverty”. John McDonnell, former Shadow Chancellor, also promised an amendment if the policy is unchanged.
The Financial Times reports that “scores” of MPs are expected to back Johnson’s motion if it goes ahead, “including newly elected Labour members”. The manifestos of the Liberal Democrats, Scottish National Party, and the Greens all included pledges to scrap the cap. Nigel Farage has opposed it.
The policy has long been controversial within Labour. When Starmer told the BBC last year that he had reversed Labour’s position, meaning the policy would not change under a Labour government until the economy had grown, it prompted a backlash. Anas Sarwar has committed Scottish Labour to opposing the policy. Gordon Brown has said the cap is “condemning children to poverty”.
The two-child limit was introduced by George Osborne in 2015, to save money and ensure that families in receipt of benefits faced similar financial choices to those supporting themselves in work. The policy only applies to children born after 5 April 2017. Institute for Fiscal Studies research suggests it affects around 2 million children, rising by 670,000 by the end of the parliament.
Has the policy achieved the aims Osborne first set it? Removing the limit would cost £3.4 billion a year – only 3 per cent of the total working-age benefit budget, or the cost of freezing fuel duty across the next parliament. Research has suggested that the limit only reduced the likelihood of having a third or subsequent child in affected families by 5 per cent after its introduction.
Despite the added costs, the preference for having more children has proved surprisingly sticky. This is perhaps due to cultural factors – 43 per cent of children affected will be in households with at least one person of Bangladeshi or Pakistani origin, groups more likely to have dependent children.
This has meant a rising number of children living in relative poverty. Almost half are single-parent families. The average household loses £4,300 a year. The percentage of children in families with three or more children in relative poverty rose from 35 per cent in 2014-15 to 56 per cent in 2022-23, as the share in poverty in families with one or two children fell from 26 to 22 per cent.
There has been long-standing Conservative criticism of this measure of poverty, especially after relative poverty fell following first the Financial Crisis and the Covid pandemic. But it is also clear that the policy has had little success in achieving its original aims, whilst depriving many poorer children of money.
As such, some Tories have already come out in opposition to continuing the cap. Suella Braverman summoned the mantle of the late Lord Birkenhead earlier this year, hoping to “abolish the two-child limit, eradicate child poverty for good, and make Frank Field proud”. We at ConservativeHome have long called for it to go, as part of a pro-family reorientation of the tax and benefit system.
Yet it has been kept in place for a simple reason: it’s popular. Times Radio polling has found that 60 per cent of voters support the policy, against 28 per cent wanting it ended. Even Labour voters support the cap: 50 per cent back it, and only 38 per cent oppose it. Starmer fears the obvious headlines: new Labour government, backing scroungers over strivers, at the taxpayer’s expense.
But if the moral and practical reasons for opposing the cap do not cut through Tories, this King’s Speech rebellion provides a more opportunistic reason. On paper, Labour has a formidable practical majority of over 170, comprised of loyal ranks of line-towing Starmtroopers. But how vulnerable is it to rebellion? How willing are Labour MPs to follow Starmer on this vexed issue?
It would be a test of principle. Can Labour backbenchers work with the Conservatives? It would be blatantly opportunistic since this is a policy we were implementing in government until just over a week ago. But the long road to Tory recovery will have to require admitting that we got an awful lot wrong in office. Despite its popularity, this is an obvious and honourable example.
We must swiftly re-learn the art of Opposition, supporting the Government where it is right – such as over housebuilding and NHS reform – whilst opposing it when it is wrong and looking out for opportunities to cause it problems. This is one of the latter. Old McDonnell has a point.