What is the two-child benefit cap? Keir Starmer suspends 7 rebel Labour MPs

Seven Labour MPs who defied the Government by backing an amendment to scrap the two-child benefit cap have lost the whip.

Apsana Begum, Richard Burgon, Ian Byrne, Imran Hussain, Rebecca Long-Bailey, John McDonnell and Zarah Sultana have been suspended from the parliamentary party for six months, after which their position will be reviewed, it was reported.

Prime Minister Sir Keir Starmer faced his first Commons rebellion on Tuesday as the Government comfortably defeated calls to scrap the cap.

But the division list showed seven MPs rebelled to back the SNP-led amendment. The SNP yesterday argued that the policy is pushing children into poverty.More than 40 Labour MPs recorded no vote, with some of those listed spotted in the chamber throughout the day, while others will have had permission to miss the vote.

The row over the controversial policy is rumbling on.

Sadiq Khan is another who has said he wants to see the two child benefit cap scrapped “as soon as the Labour Government can”.

The London mayor was, however, careful to avoid aligning himself with the under-fire MPs who rebelled.

Mr Khan said MPs who are concerned about changing the policy should instead “feed into” the Government's Child Poverty Taskforce – a review set up by ministers last week.

The cap, introduced under the Conservatives in 2017, prevents almost all parents from claiming Universal Credit or child tax credit for more than two children.

MPs rejected the SNP amendment by 363 votes to 103, in the first major test of the new Labour government’s power.

Ex-shadow chancellor John McDonnell said in the week following the election that he might seek to amend the Budget to scrap this welfare restriction if the Government does not take this step itself.

McDonnell, MP for Hayes and Harlington in London, said: “Across the Labour party, across the parliamentary Labour party, I think there is a view that this should be done and it’s better done sooner rather than later.

“So, I think the argument has been won.

“Now we are in government, it’s just a matter of saying, ‘Look, how practically can we do this?’

“Most of us think this needs to be done sooner rather than later because the immense suffering our children are going through.”

Pressure is building to scrap the policy, with new figures showing more than one-and-a-half million children across the UK are affected.

An independent thinktank has said that the majority of children in large families will fall below the poverty line by the end of this parliament five years from now, unless the policy is abolished.

Figures published on Thursday by the Department for Work and Pensions (DWP) showed there were 1.6 million children living in households affected by the policy as of April this year, up from 1.5 million to April 2023.

Of these, 52 per cent of children were in households with three children, 29 per cent in households with four children, and 19 per cent in households with five or more children.

But what exactly is the two-child benefit limit, how has it affected British families, and how much is current child benefit?

Here is everything we know.

What is the two-child benefit limit?

The benefit cap first came into effect in 2013, limiting the amount of benefits a household could receive.

Then later, in 2017, a two-child limit was brought in with the hopes of encouraging parents of larger families to get jobs and low-income families to have fewer children.

The policy prevents parents from claiming child tax credit or universal credit for their third or subsequent children born after April 2017.

How has the child benefit limit affected UK families?

Recent research conducted by the universities of York, Oxford, and London School of Economics revealed that the two-child limit and the benefit cap had failed to meet their own goals, having zero positive incentive impact on employment and failing to reduce fertility among poorer families.

Plus, it was found that the cap had been “poverty-producing”, causing thousands of low-income families anxiety and hardship.

Talking about their findings, Ruth Patrick from the University of York has shared: “Our research evidence makes clear that the two-child limit and benefit cap are poverty-producing policies, which fail to meet their stated aims. Both policies need to be removed urgently, as part of a broader commitment to addressing child poverty and investing in children and families.”

Who wants to see the Child Benefit limit abolished?

Suella Braverman, Nigel Farage, Justin Welby the Archbishop of Canterbury as well as former Labour prime minister Gordon Brown are just a few who want to see the Child Benefit limit scrapped.

Farage voiced his opinion on the subject when questioned on the cap during a general election debate. Farage said: ”I think we should encourage people to have families.

”I think we should encourage people to have children. I think we should also encourage people in marriage to have some tax benefits as well. We’ve got to help people.”

Braverman waded into the row by telling The Telegraph on May 11, “Let’s abolish the two-child limit, eradicate child poverty for good and make Frank Field proud.”

While the Most Rev Welby argued that scrapping the limit would “lift thousands of children out of poverty”.

One person that may help change Starmer’s mind is former prime minister Brown. Last month, he outlined how the two-child limit affects the entire family, not just the third or fourth child, and how the typical family loses £60 a week as a result.

"A struggling or low-income household cannot afford to lose £60 every week.” he said on BBC Radio 4’s Today programme on May 15.

However, Starmer has said he would abolish the cap when he had the resources.

How much is Child Benefit?

For the 2024-2025 financial year, Child Benefit will see a family’s eldest or only child given £25.60 per week. Any additional children will receive £16.95 from the Government.

Child Benefit is usually paid every four weeks on a Monday or Tuesday. However, you can have the money paid weekly if you’re a single parent or getting certain other benefits, such as Universal Credit.

If either of the parents’ adjusted net income is more than £50,000 a year, they may have to pay the High Income Child Benefit Charge.

More information about this can be found on the Government’s website.