Starmer 'working on' two child benefit cap announcement at Labour party conference

LBC understands the PM is looking to make the major intervention as he attempts a huge reset of his government following weeks of turbulence.

Sources said work was underway to make the move, after months of kicking the can down the road under the government's child poverty strategy, which was due in the spring.

No10 said they would update on the poverty strategy and two child benefit cap in the autumn.

Education Secretary Bridget Philipson - who is a co-chair of the review - last week gave a major hint that it was on the cards to be binned, describing it as a "spiteful attack on children" and had pushed more into poverty.

Sir Keir has previously signalled his intention to ditch it when economic conditions allow.

Labour backbenchers and Reform have repeatedly called for the move, which could lift half a million families out of poverty.

The cap - which limits benefits to the first two children in a family - affects around 1.7million children across the UK.

Scrapping it would cost £3.5billion a year.

Labour grandees including Gordon Brown have long called for the government to abandon it in a return to traditional values.

The former PM has said the Chancellor should pay for it with changes to gambling levies, which LBC understands are being actively considered by the Treasury.

Speaking to reporters in August, Rachel Reeves said she shared Brown's concerns, adding: "We're a Labour government, of course we care about child poverty".

"We've already launched a review into gambling taxes, we're taking evidence on that at the moment," she added.

"We'll set out our policies in the normal way, in our Budget later this year".

Speaking after a conference on child poverty in Glasgow today, Scotland's First Minister John Swinney said he would welcome the move if it happens.

His government has been engaging with the DWP to gain information in order to mitigate the two child cap in the Scottish Government's budget for the next financial year.

He told LBC: "This is an action, if the PM announces it, is something he should have done well over a year ago. It should have been one of the first acts of a UK Labour government.

"This is an absolutely appalling remnant of the Tory government but Keir Starmer has not only been prepared to keep it in place but he's whipped his MPs to vote against proposals to abolish it. So if we see the abolishment of it at a UK level I would welcome that but it's ages overdue."

The PM has stepped up engagement with backbench MPs in recent weeks as he seeks to shift from the chaos that's engulfed the last few weeks of the so-called "phase two" of his government.

After losing his deputy, Angela Rayner, and the US ambassador, Peter Mandelson, in the space of a week, party insiders are pointing to the conference for a moment for a reset.

The PM's also expected to make a major speech this week ahead of the party's conference which starts this weekend.

Sir Keir is expected to say the UK is at a "crossroads" moment and his government will lead the fight back against the populist polities of Reform.

Insiders said his intervention would be to launch a progressive fightback against the "decline and division" fuelled by Nigel Farage.