Higher borrowing makes scrapping the two-child benefit cap unaffordable, Labour says

The Treasury chief secretary appeared to explicitly rule out abolishing the cap at the next Budget, while conceding it was not a decision the Government would want to make “in our hearts”.

This comes as new figures showed borrowing in July jumped by far more than expected, standing at £3.1 billion rather than the £1.1 billion as experts had predicted.

Asked about the prospects of abolishing the two-child benefit cap at the Budget on October 30, Mr Jones told the BBC: “You have to just look at the economic statistics that we’re talking about today to understand why we just can’t afford to do that right now.”

He said abolishing the cap would cost up to £3 billion per year, while borrowing for the first four months of the financial year was already £4.7 billion more than expected.

Saying the public expected the Government to get public spending “back under control”, he added: “That means that we have to make very difficult decisions that in our hearts we wouldn’t want to have to make, and that includes on the two-child cap as well.”

The Government has insisted it is committed to reducing child poverty, with Education Secretary Bridget Phillipson and Work and Pensions Secretary Liz Kendall heading up a ministerial task force to develop a child poverty strategy.

But charities, including those consulted by the task force, have repeatedly said abolishing the two-child limit was the simplest and most effective way of lifting children out of poverty.

Resistance to abolishing the limit brought the Government’s first rebellion, with seven MPs voting in favour of an opposition amendment to the King’s Speech calling for an end to the policy.

Those MPs – including Bradford East’s Imran Hussain and Leeds East’s Richard Burgon – had the Labour whip suspended.

Asked about potential tax rises, Mr Jones reiterated his party’s manifesto pledge not to increase income tax, employee national insurance contributions, or VAT.

Conservative former chancellor Jeremy Hunt accused his successor Rachel Reeves of being “committed to her economic con, regardless of the evidence”.

He said: “These are tax rises that she has planned right from the beginning, but simply did not have the courage to tell the British public about during the election.”