Exclusive:Risk of repeat of mini-budget stopping Labour scrapping two-child benefit cap, says Anas Sarwar

Labour figures were attacked by the SNP over their failure to commit to scrapping the two-child limit.

Fear of repeating the financial mismanagement of the mini-budget is driving the decision not to commit to scrap the two-child benefit cap, Scottish Labour leader Anas Sarwar has said.

Sir Keir Starmer and other senior Labour figures have come under pressure from external and internal critics for the party’s position. The UK Labour leader again confirmed on Sunday that scrapping the clause was not party policy, with the SNP stating it was part of the desire of the party to “prove their Tory credentials”.

The two-child benefit cap – dubbed by some as the “rape clause” – precludes families from applying for child tax credit and Universal Credit for more than two children, although an exemption exists if a child is conceived through rape and this can be proven.

Senior Scottish Labour figures such as Monica Lennon attacked the failure of the party to commit to scrapping the cap – a move that follows years of campaigning against the clause from many Labour parliamentarians.

Asked whether he agreed with the decision not to scrap the rape clause, Mr Sarwar told The Scotsman that he believed it was a “sensible” and “grown-up” approach for the opposition to say it cannot fix everything immediately if Labour are elected at the next general election.

The MSP said it was the fear of getting fiscal policy wrong and spooking the markets with a repeat of the mini-budget that brought down the Liz Truss government that was preventing a commitment to scrapping the rape clause.

He said: “I will continue to urge them [UK Labour] to move as fast as they can to address the issue of the two child cap, but cognisant of the fact that they have to do it within the fiscal rules that are set because we cannot have a repeat of the Kwasi Kwarteng/Liz Truss budget that means if we get it wrong, and we spook the markets, it means higher interest rates, higher inflation and higher mortgage payments for people across the country."

Mr Sarwar added: “I continue to believe that it is a heinous policy that is doing damage to families across the country and that it is exacerbating poverty. I know that my colleagues in the UK party continue to believe that as well. But what they are being up front and straight about is we have to look at the financial circumstances that we’ll find ourselves in.

"What they have done is they’ve committed to reforming Universal Credit. They recognise this needs addressed, but what they have not yet done is set a timetable for when that can be addressed because of that economic climate. I think that is a sensible approach.”

Mr Sarwar said Labour were right to make clear to voters the party would not be able to do “everything that we want to do or need to do” immediately. He said: “We have got to be honest with people and say we don’t know the state of the economic carnage that the Conservatives are going to leave for us if we get elected.

"We are not going to be able to fix everything straight away and we’re not going to be able to do everything that we want to do or need to do because of the state of that financial crisis. I think having that grown-up approach most people will recognise and appreciate.”

SNP MSP Collette Stevenson said it was “incredibly disappointing” to see Labour’s position on the two-child benefit cap change.

She said: "Labour can never justify u turning to support a cruel policy which is knowingly pushing more families and children into poverty. Their current chaotic policy decision-making has left their own members criticising this recent U-turn.

"It's incredibly disappointing to see Keir Starmer's Labour party so intent on proving their Tory credentials that they are now trying to defend such immoral and harmful policies, when they once stood alongside SNP politicians to fight the Tories on the issue.

"People across Scotland deserve better. The SNP will always take action where we can to reduce and eradicate poverty, but it's clear that only independence will allow us to end cruel Tory policies for good."