Keir Starmer is facing a fresh welfare row today after figures showed a rise in the number of children and families affected by the two-child benefit cap. New data from the Department of Work and Pensions showed 1,665,540 children living in households in Great Britain affected by the restriction in April, up 37,150 (2 per cent) from April 2024.

There were a total of 469,780 households on Universal Credit affected by the policy – an increase of 13,520 (3 per cent) over the same period - with almost two thirds (59 per cent) having members in work. The figures dropped against a backdrop of the PM struggling to even keep welfare payments at their current level, let alone reduce them to save money.

Last night he finally forced his gutted disability welfare proposals through the House of Commons - despite another Labour revolt. Some 47 backbenchers rebelled against the changes, even though the PM had already caved in on all the key elements.

The Government is expected to publish a child poverty strategy in autumn, and a multitude of campaign groups have said it must contain a commitment to do away with the two-child benefit limit. The limit restricts child tax credit and universal credit (UC) to the first two children in most households.

Green MP Sian Berry this morning called for a 'wealth tax' to be brought in to pay for the cap to be lifted. But at the weekend Education Secretary Bridget Phillipson warned Labour welfare rebels spending decisions have been made 'harder' after the watering down of welfare reforms.

Organisations working in the sector argue that 109 children across the UK are pulled into poverty by the policy every day and that an estimated 350,000 children would be lifted out of poverty immediately if it was scrapped. Ms Phillipson has previously said ministers are 'looking at every lever and we'll continue to look at every lever to lift children out of poverty', but the End Child Poverty Coalition insisted 'this is the lever that needs pulling first'.

Its chairman Joseph Howes said the Government's 'moral mission' to end child poverty will fail if this policy remains', arguing that 'no child poverty strategy will succeed in lifting kids out of poverty, if this policy remains'. He added: 'We have heard the Government say that they are looking at all 'the available levers' to reduce child poverty. We all know that this is the lever that needs pulling first – backed up by the Government's own data released today. It's time for the Government to act.'

The latest data comes days after a report from the Children's Commissioner told of some young people in England living in an 'almost-Dickensian level of poverty'. Lord John Bird, Big Issue founder and crossbench peer, said: 'When we hear warnings of children in the 21st century living in Dickensian levels of poverty, we must call this what it is: a poverty crisis. And Government policy that creates this crisis cannot be tolerated.'

He said any savings the policy makes now will 'create far more expense for our society now and down the line' with consequences likely to be felt in schools, the NHS, prisons 'and one day, in the same social security system that fails these children'. Lord Bird added: 'It is both a moral and a political necessity that this Government ends the two-child benefit cap at the autumn budget. The public will not stomach any more inaction from Labour. They came to power promising an enduring reduction in child poverty and we must have legal targets to hold them to account.'

Barnardo's said while recent Government announcements on the expansion of free school meals and the rollout of family hubs are welcome, 'without immediate action, child poverty will simply continue to rise'. The children's charity described the upcoming child poverty strategy as 'a huge opportunity for the Government to change the futures of millions of children, so they have the chance to thrive'.