Government U-turns on welfare reforms have “hardened” spending decisions, according to the education secretary, who refrained from pledging to abolish the two-child benefit cap.
Speaking on BBC One’s Sunday With Laura Kuenssberg, Bridget Phillipson stated that ministers are “looking at every lever” to alleviate child poverty.
However, she cautioned that removing the cap would “come at a cost,” while emphasizing the government’s ongoing support for families facing cost of living pressures.
This follows a rebellion by Labour MPs that significantly weakened a set of welfare reforms initially projected to save £5 billion annually by 2030.
The government’s partial retreat means these savings will likely be delayed or forfeited, adding pressure on Chancellor Rachel Reeves ahead of the autumn Budget.
Prior to the adjustments to its welfare plans, the Labour government had been contemplating lifting the two-child benefit cap, a policy limiting means-tested benefits to a maximum of two children per family for those born after April 2017.
Government figures indicate that approximately 1.6 million children reside in households affected by the cap, according to the Department for Work and Pensions.
Analysis by the Institute for Fiscal Studies estimates that scrapping the policy would cost the government around £3.4 billion per year and lift 500,000 children out of relative poverty.
When questioned by Kuenssberg on whether the chances of abolishing the cap had diminished, Phillipson acknowledged: “The decisions that have been taken in the last week do make decisions, future decisions harder.”
She added: “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.”
Phillipson and Work and Pensions Secretary Liz Kendall are co-leading a child poverty taskforce, which is evaluating the case for removing the cap, among other policy options.
The taskforce is expected to publish a strategy for reducing child poverty in the autumn.
The government initiated the taskforce last year, amid calls from opposition parties and some Labour MPs to scrap the two-child benefit cap.
Significant support remains among many Labour backbenchers for lifting the cap, particularly among those who were vocal opponents of the planned welfare cuts.
In May, Phillipson stated that “nothing is off the table” when asked about the possibility of lifting the cap.
However, in an interview with The Guardian on Friday, Chancellor Rachel Reeves said she was “not wedded to any specific policy” to reduce child poverty.
Reeves added that it would be “irresponsible” for a chancellor to rule out tax rises and acknowledged “there are costs to what happened” with welfare.
Phillipson echoed a similar sentiment on the Sunday with Laura Kuenssberg programme.
The cabinet minister said scrapping the two-child benefit cap “does come at a cost, and that’s why, in keeping with our fiscal rules, we do need to make sure that we have a strong foundation for the economy.”
Phillipson stated that while the cap was “an important consideration,” it was “not the only way that we are supporting and will support families,” citing the expansion of family hubs, free school meals, breakfast clubs, and childcare.
In a post on X, Labour MP Jon Trickett, who voted against the government’s welfare changes, wrote: “The suggestion that a Labour government will leave children in poverty because they couldn’t take welfare benefits from the disabled is truly shocking.”
Conservative shadow chancellor Mel Stride, also appearing on the program, asserted that the government had made some “poor choices” and argued that more could be done to reduce the growing benefits bill.
He stated his party would attempt to make changes to the government’s welfare reform bill as it proceeds through Parliament.
One proposed amendment would reduce entitlement to disability and health-related benefits for individuals with less severe mental conditions.
IFS analysis indicates that mental health or behavioral conditions account for more than half of the increase in 16-64 year-olds claiming disability benefits since the Covid-19 pandemic.
Absent policy changes, the health and disability benefits bill is projected to reach £70 billion annually by the end of the decade, a level of spending the government deems “unsustainable.”
The Conservatives have referenced a report by the Centre for Social Justice, which argued that reducing mental health benefits for all but the most severe cases would save £7.4 billion per year by 2030.
“We believe, particularly when it comes to mental health, one of the best solutions to those kinds of challenges is work,” Stride said.
“We are the party that believes in work. We don’t believe that welfare should trap people.”
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