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18 July 2023

Will the child benefit cap fracture Starmerism?

Shadow cabinet ministers are toeing the line but the Scottish Labour leader Anas Sarwar has said he will still scrap the two-child limit.

By Freddie Hayward

On it goes. The shadow cabinet ministers Jon Ashworth and Lucy Powell have been sent out to media studios to prove their loyalty and defend Keir Starmer’s commitment to keep the two-child benefit cap. The policy has led to quiet disgruntlement throughout the party. Anas Sarwar has said Scottish Labour remains committed to ditching the policy. Several MPs expressed misgivings at the Parliamentary Labour Party meeting last night. Meanwhile, Jamie Driscoll, the North of Tyne mayor, has resigned from the party after Labour refused to select him as a candidate for the North East mayoral election.

Ashworth and Powell took the line that Labour won’t introduce unfunded spending commitments, with Powell going so far as to say “there’s no money left, to coin a phrase” on Times Radio this morning.

Powell’s invocation of the then chief Treasury secretary Liam Byrne’s 2010 letter to his successor, the original “no money” message, is quite the tactic given the note has been used against Labour ever since. This was the same line that the coalition used to justify austerity. Powell’s quotation feels designed to provoke and prod those who have reluctantly accepted the limited spending plans imposed by Rachel Reeves. Sensing danger, the shadow chancellor made a plea for her colleagues to recognise the necessity of spending restraint at the New Statesman’s summer reception last night. The debate over the two-child cap has become a test of that approach.

As I wrote yesterday, the fact that Starmer didn’t simply fudge his answer when asked whether he would keep the two-child limit – as he has done with many other policies – suggests the leader’s team sees this as an opportunity to provoke a fight big enough to prove their fiscal-conservative credentials. If it won’t commit to £1.4bn for a policy recently condemned by the party as “heinous”, then he must be really responsible with the public finances!

When Starmer is interviewed by Tony Blair at 4pm today at the latter’s Future of Britain conference, it will be the first time in a while that his party has shown signs of disunity. A looming reshuffle and Starmer’s poll lead will help keep his party in line, and reduces the likelihood that senior figures will express their grievances in public. But it could presage problems to come.

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This piece first appeared in the Morning Call newsletter; subscribe to it on Substack here.

[See also: Does Labour’s soft left have a future?]

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