Axing two-child benefit limit still on table but 'harder' after welfare U-turn, minister says

Scrapping the two-child benefit limit remains on the table - but last week's welfare U-turn will make it harder, a top minister has said.

Education Secretary Bridget Phillipson insisted the Government was "looking at every lever and we'll continue to look at every lever to lift children out of poverty".

But she said it would be more difficult to find the money to axe the austerity-era measure after Keir Starmer was forced to gut his planned disability benefit cuts to see off a Labour revolt.

The welfare climbdown has left a £5billion hole in Rachel Reeves's spending plans. Ms Phillipson, who is working on a long-awaited child poverty strategy, distanced herself from reports that plans to scrap the two-child limit were now "dead in the water".

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Many Labour MPs oppose the cap, which could become a new focal point for tensions between backbenchers and Downing Street. The policy, introduced in 2017, restricts claims for Child Tax Credit and Universal Credit to the first two children.

About 1.6 million children live in households affected by it, which would cost around £3.4billion a year to lift. The Institute for Fiscal Studies has estimated that getting rid of the cap would lift 500,000 children out of relative poverty.

Asked if the Government could no longer afford to scrap it, she told the BBC: "We’re looking at every lever, we will continue to look at every lever to lift children out of poverty. It will be the moral mission of this Labour government, to lift children out of poverty."

But she said there was a cost to the decision to shelve plans to restrict eligibility for the Personal Independence Payment (PIP) until after a review next year.

Ms Phillipson said: "The decisions that have been taken in the last week do make decisions, future decisions harder. But all of that said, we will look at this collectively in terms of all of the ways that we can lift children out of poverty."

She said she was "not going to pretend that it hasn't been a tough or a challenging week" and acknowledged that the Government botched its handling of the welfare reforms.

"What the Prime Minister has said, and what I also believe, is that what we set out, we pushed ahead too fast, we didn't listen enough to people, including, I would say, including to lots of people who had concerns about the nature of that change," she said.

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