Lord Neil Kinnock has called on Sir Keir Starmer to abolish the two-child benefit cap, warning that the policy is trapping hundreds of thousands of children in poverty.
The Labour peer and former party leader said the cap, which restricts families from claiming child tax credit or Universal Credit for their third and subsequent children, should be dismantled even if only gradually because of the financial cost.
“I would want them to do it. They may not be able to do it all at once, but I really want them to move in that direction. If that happened, around 600,000 fewer children would be in poverty.”
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The Conservatives introduced the cap in 2017. Sir Keir has so far resisted pressure to reverse it, arguing that the fiscal implications make the move difficult. Seven Labour MPs were suspended last summer for backing an SNP plan to abolish the policy.
Lord Kinnock’s comments will add to the growing demands on Chancellor Rachel Reeves ahead of the autumn Budget, where she is already grappling with what officials describe as a £50 billion hole in the public finances.
Phillipson recently admitted that Starmer’s decision to accept some welfare cuts left less room to act on child poverty. She said: “The decisions that have been taken this last week do make future decisions harder. But we will look at all of the ways that we can lift children out of poverty.”
Kinnock reiterates call for wealth tax
Alongside scrapping the cap, Lord Kinnock repeated his call for a wealth tax. He suggested a two per cent levy on assets worth more than £10 million, arguing it would shift resources from the richest households to struggling families.
“I think people would see the justification of increasing taxes on assets and the very, very highly paid – the top one per cent – in order to make the transfer directly to reduce child poverty,” he said. “I know it’s the economics of Robin Hood, but I don’t think there is anything terribly bad about that.”
Labour’s leadership has so far ruled out such a tax. Business Secretary Jonathan Reynolds has dismissed the idea as daft”, although Angela Rayner, the Deputy Prime Minister, was revealed to have pressed privately for higher taxes on the wealthy in a memo to Ms Reeves earlier this year.
Former prime minister Gordon Brown has also condemned the two-child limit, branding child poverty a cancer in society and comparing today’s deprivation to what he witnessed growing up more than half a century ago.
“What the Conservatives did was to treat the third children as if they were second-class citizens,” he said. “But the needs of a third child are exactly the same as the needs of the first and second.”
While Labour ministers have avoided committing to abolishing the policy outright, senior figures such as policing minister Dame Diana Johnson have suggested that new sources of revenue, including wealth taxes, should at least be looked at and discussed.
