CHARITIES have urged the Prime Minister to scrap two-child limit, warning child poverty could hit record highs under Labour if it fails to do so.

Dubbed the “sibling penalty,” the cap blocks families from claiming universal credit or child tax credit for more than two children. 

According to Child Poverty Action Group, scrapping the policy would lift 350,000 children out of poverty and ease hardship for another 700,000.

The group has joined other major charities — including Barnardo’s, Save the Children UK, and Citizens Advice — in signing a letter to Keir Starmer, urging him to drop the scheme, calling it the “most cost-effective way to reduce child poverty.”

The letter was sent ahead of the much-awaited publication of Labour’s child poverty strategy.

“We know that the strategy has the potential to make a crucial difference to the daily lives and life chances of children up and down the country,” the letter reads. 

It goes on to warn that the 4.5 million children in poverty will increase to 4.8 million by 2029 unless urgent is action is taken.

“Scrapping the two-child limit is by far the most cost-effective way to reduce child poverty,” it says.

“If it is not scrapped, the stark reality is that child poverty will be significantly higher at the end of this parliament than when the government took office making this the first time a Labour government would leave such a legacy, and the number of children living in poverty will be at its highest since records began.”

It noted that plans to reduce child poverty “will be made even harder” following Labour’s plans to cut £5 billion a year on disability benefits. 

Labour suspended the whip from six MPs who supported an SNP amendment to the King’s Speech to scrap the cap last July.

At the time, Chancellor Rachel Reeves said that she would not make an “unfunded” pledge to drop the scheme, which she said would cost £3 billion a year.

According to End Child Poverty Coalition, child poverty costs Britain £39bn a year, taking into account lost economic output and additional public service spending.

The Guardian reported last month that parents of under-fives could be exempted from the two-child limit under a range of options that ministers are reportedly considering without removing the cap altogether.

The government’s child poverty strategy was due to be published in spring, although charity End Child Poverty Coalition has said it believes the it may not arrive until June.

A government spokesperson said: “No child should be in poverty — that’s why our Ministerial Taskforce is exploring all available levers to give every child the best start in life as part of our Plan for Change.

“Alongside delivering on our Get Britain Working White Paper to support people into good jobs and make everyone better off, we’re increasing the Living Wage, uprating benefits and supporting 700,000 of the poorest families by introducing a fair repayment rate on Universal Credit deductions to help low-income households.”