Labour may not be able to afford to reverse “lots of bad policies”, a senior MP has warned, amid party divisions over Sir Keir Starmer’s plans to keep the two-child benefit cap in place.
Shadow culture secretary Lucy Powell said on Tuesday that there is “no money left” for the party to roll out all the reforms it would like to if it wins the next general election.
There has been disquiet among Labour MPs after party leader Sir Keir confirmed he would retain the Conservatives’ cap which has been criticised for pushing families into poverty.
The policy, introduced by Tory former chancellor George Osborne during his austerity drive, prevents parents claiming Universal Credit for any third or subsequent child.
Scrapping the cap would lift around 270,000 households with children out of poverty at an estimated cost of £1.4 billion in the first year.
Ms Powell told Sky News: “We’ve opposed this policy, this is not a good policy. We’ve opposed it for many years through Parliament, but we’re now in a very different economic situation.
“As a famous phrase would go, there is no money left, the Government has absolutely tanked the economy.
“I don’t know it is dividing the shadow cabinet.”
She was reminded that shadow work and pensions secretary Jonathan Ashworth has previously described the policy as “heinous”.
Ms Powell said: “Both can be true at the same time, that things can be a bad policy, they can be bad politics, but the economic reality is what we’re now faced with.
“There are lots of bad policies… we’re not implementing them, it’s about not reversing…”
After 13 years there is a lot of things that we need to put right and we’ve got action plans to do some of that
Shadow culture secretary Lucy Powell
Deputy Labour leader Angela Rayner has also described the cap in the past as “obscene and inhumane”.
Ms Powell added on LBC: “Both things can be true at the same time, which is that things can be bad policy and an awful situation but that we can’t immediately afford to do something about them.
“And that is true of a whole range of issues, I’m afraid. After 13 years there is a lot of things that we need to put right and we’ve got action plans to do some of that.”
Ms Rayner had to deal with concerns raised by multiple backbenchers at a meeting of the Parliamentary Labour Party on Monday evening despite defences from senior figures.
Jon Trickett, an MP on Labour’s left, referred to House of Commons Library research from last week suggesting that removing the cap would cost around £1.4 billion this year and £1.7 billion next year.
He said: “The country could, and should, immediately take hundreds of thousands of families out of poverty in an instant by ending the two-child benefit cap.”