Keir Starmer can’t afford to abandon the two-child benefit cap – and can’t afford not to

Political reporting is sometimes more cautious than it needs to be. Rachel Reeves was said to have “hinted” or “signalled” that she will lift the two-child limit on benefits in her interview with the BBC yesterday.

No, she didn’t. She announced the change.

While talking about the Budget, she said: “I don’t think that it’s right that a child is penalised because they are in a bigger family through no fault of their own.” Her next sentence was: “And so we will take action on child poverty.”

That could not be clearer. At the moment, third and subsequent children born since 2017 into families claiming benefits are in deeper poverty “through no fault of their own”. The only way to “take action” on that is to abolish the two-child limit.

Her announcement was confirmed by Keir Starmer in his interview with ITV this morning. Admittedly, he was not quite so explicit: “I wouldn’t be telling you we’re going to drive down child poverty if I wasn’t clear that we will be taking a number of measures in order to do so.”

But he wouldn’t be telling us anything of the sort if he and Reeves hadn’t decided to do it.

And a good thing, too. Ending the two-child limit is the single most effective thing the government can do if its aim is, as it should be, to reduce child poverty.

Against that, it is argued that hard-working taxpayers should not be subsidising people on benefits who cannot afford to have children to have more than two. Ideally, of course, they should not, but Reeves’s argument outweighs that, in my opinion. It is no fault of a child’s that they are born into a poor family. However much we might disapprove of the actions of the parents, it is wrong that the child should suffer.

Somehow, though, it seems unlikely that a grateful nation will hang out the Child Poverty Action Group bunting and enthusiastically reward a caring Labour government in the opinion polls.

The two-child limit is popular with the general public – although I suspect that if pollsters asked a question about “penalising” children who are in bigger families “through no fault of their own”, they might get a different answer.

And lifting the limit is expensive, costing £3.5bn a year, adding to the betrayal of Labour’s tax promises. However pollsters phrase it, breaking a manifesto pledge by raising income tax to pay parents who cannot afford to have children to do so will never be a hit.

So why is Reeves doing it? If it is the right thing to do now, why wasn’t it right last year, when seven Labour MPs were suspended from the parliamentary party for voting for it? Then, it came under the heading of things that Reeves would like to do but could not afford to: “If we cannot afford it, we cannot do it.”

How come, then, when the public finances have worsened – and worsened so much that she and Starmer have decided to tear up the manifesto on tax – can we afford it now?

The simple reason is that Starmer is fighting for his political life. Labour MPs are talking increasingly openly of ousting him, and for a lot of them the battle against child poverty is a core cause. That is why Starmer decided months ago that scrapping the two-child limit was the only way to buy them off. The Treasury resisted, but Reeves herself avoided taking a position, well aware of the dangers of a split between a prime minister and a weak chancellor.

Now she and Starmer have made the decision, jointly, but with the push coming from No 10.

First, they decided to break the manifesto promise on tax – because they have to: the gap is too wide to be bridged by sin and stealth taxes, and Labour MPs won’t allow reductions in spending plans. Then the prime minister and chancellor decided that, if they are going to break the promise, they should do it with conviction and spend more to cut child poverty.

Inevitably, they have been rewarded by Labour MPs who want to scrap the two-child limit complaining about breaking the manifesto pledge.

So there we are. Starmer has done the right thing, which will be unpopular with the voters, because he is too weak to resist Labour MPs, who aren’t grateful. As the late Alan Watkins often observed, politics is a rough old trade.