Keir Starmer and Morgan McSweeney, his powerful chief of staff, are at odds over scrapping the two-child benefit cap. Starmer wants to lift the limit and ease child poverty. McSweeney fears the £2.5 billion cost.
📊 A £2.5 billion dilemma
The cap cuts payments to households with more than two children. Ending it would cost £2.5 billion a year. Starmer sees it as a moral duty. McSweeney worries about fiscal stability.
🚦 From manifesto pledge to grim reality
Labour ran on fiscal caution. Its MPs expect action on poverty. Four ministers—Starmer, Rachel Reeves, Liz Kendall and another—backed scrapping the cap in March. McSweeney stalled the plan, citing polling that Labour voters find the cap “fair.”
McSweeney has served as Downing Street Chief of Staff under Prime Minister Keir Starmer since October 2024.
🔄 Local election losses ramp up pressure
Bruising local defeats forced a rethink. Starmer U-turned on cutting winter fuel payments. Now, MPs urge him to soft-pedal the benefit cap too. Reeves hinted at relief for struggling families in a recent interview.
📈 Experts and ex-PM weigh in
The Institute for Fiscal Studies says removing the cap would lift 540,000 children out of absolute poverty. Gordon Brown called it “the cost-effective way of getting more children out of poverty.” He even proposed funding via higher gambling taxes or cutting bank deposit rates.
⏳ Time’s running out
Inside No 10, some say the cap’s fate shouldn’t wait for the next fiscal statement. “As the economy improves, we want to take measures that impact people’s lives,” Starmer told MPs on Wednesday. With McSweeney gradually losing ground, a decision looks imminent.
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