Panicking Prime Minister plans another u-turn over benefits as he struggles to stop the rise of Reform
Keir Starmer and Rachel Reeves are at war over the two-child benefit cap (Image: Getty)
Panicking Sir Keir Starmer plans another u-turn as Labour fears about the rise of Reform grow, this time by ending the two-child benefit cap. But it puts him on collision course with Chancellor Rachel Reeves, who is understood to be worried about the £3.5 billion cost.
The Prime Minister last year suspended seven Labour MPs after they voted against the cap, which prevents parents from claiming child tax credit or universal credit for more than two children. But he has now told cabinet ministers that he wants to scrap the cap himself and has asked the Treasury to identify ways to fund the plan, it ws reported last night.
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Kemi Badenoch slams ‘desperate’ Keir Starmer for ‘shafting country’ on winter fuel U-turn
It follows his u-turn over winter fuel allowance, when he announced changes to the means-testing policy introduced by Chancellor Rachel Reeves.
But the changes of policy are sparking anger among Labour MPs, many of whom are pleased to see the end of benefit cuts but are asking why they were ordered to defend the controversial policies for so long only to see them abandoned by the party leadership.
It follows Labour’s huge defeat in local elections on May 1, when the party also lost the Runcorn and Helsby by-election to Reform.
Axing the two-child cap will cost £3.5bn a year. Work and Pensions Secretary Liz Kendall and Education Secretary Bridget Phillipson have been pushing for the change.
Ms Reeves is worried about the cost but the Prime Minister is determined to take her on, the Observer reports. It reports a source said: “Keir is becoming more assertive with the Treasury. You can see that with the winter fuel allowance. He is more determined to drive through the things he wants.”
Options include a new tax on gambling companies.
Anti-poverty charity the Resolution Foundation has warned that the two-child cap must be scrapped to stop child poverty reaching record levels. It has warned the number of children below the poverty line is set to rise to an all-time high of 4.6 million.
Meanwhile the Government is also scrabbling to find a way to get Winter Fuel Allowance to more pensioners before winter.
Simply increasing the threshold will be difficult to implement and Whitehall’s ageing computer systems may be unable to introduce the change before the cold weather returns.
Options include restoring the allowance of up to £300 for every pensioner and then clawing money back from the richest through income tax.
Labour MPs are also stepping up calls for a u-turn over cuts to Personal Independence Payments, which are paid to people with disabilities.
The Government has announced it is removing Personal Independence Payments for 800,000 people, including 370,00 current claimants and 430,000 people who will no longer be eligible in the future, each losing an average of £4,500.
