Sir Keir Starmer could decide to lift the two-child benefit cap in the autumn budget, amid further pressure from Nigel Farage to appeal to traditional Labour voters.

The Reform leader will use a speech this week to commit his party to scrapping the two-child cap, as well as reinstating winter fuel payments in full.

The prime minister – who took Westminster by surprise at PMQs by revealing his intention to row back on the winter fuel cut – has previously said he would like to lift the two-child cap if the government could afford it.

There are now mounting suggestions an easing of the controversial benefit restriction may be unveiled when the chancellor delivers the budget later this year.

According to The Observer, Sir Keir told cabinet ministers he wanted to axe the measure – and asked the Treasury to look for ways to fund the move.

It comes after the government delayed the release of its child poverty strategy, which is expected to recommend the divisive cap – introduced by former Tory chancellor George Osborne – is scrapped.

Ministers have already said any changes to winter fuel payments, triggered by mounting political pressure, would only be made when the government’s next fiscal event rolls round.

The Financial Times reported it may be done by restoring the benefit to all pensioners, with the cash needed being clawed back from the wealthy through the tax system.

The payment was taken from more than 10 million pensioners this winter after it became means-tested, and its unpopularity was a big factor in Labour’s battering at recent elections.

Before Wednesday’s PMQs, the prime minister and chancellor had insisted there would be no U-turn.

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Many Labour MPs have called for the government to do more to help the poorest in society, amid mounting concern over the impact of wider benefit reforms.

Former prime minister Gordon Brown this week told Sky News the two-child cap was “pretty discriminatory” and could be scrapped by raising money through a tax on the gambling industry.

Mr Farage, who believes Reform UK can win the next election, will this week accuse Sir Keir of being “out of touch with working people”.

In a speech first reported by The Sunday Telegraph, he is expected to say: “It’s going to be these very same working people that will vote Reform at the next election and kick Labour out of government.”

Sir Alan Bates has accused the government of presiding over a “quasi kangaroo court” for Post Office compensation.

Writing in The Sunday Times, the campaigner, who led a years-long effort for justice for sub-postmasters, revealed he had been given a “take it or leave it” offer that was less than half of his original claim.

“The sub-postmaster compensation schemes have been turned into quasi-kangaroo courts in which the Department for Business and Trade sits in judgement of the claims and alters the goal posts as and when it chooses,” he said.

“Claims are, and have been, knocked back on the basis that legally you would not be able to make them, or that the parameters of the scheme do not extend to certain items.”

More than 900 sub-postmasters were prosecuted between 1999 and 2015 after faulty Horizon accounting software made it look as if money was missing from their accounts.

Many are still waiting for compensation despite the previous government saying those who had their convictions quashed were eligible for £600,000 payouts.

After the Post Office terminated his contract over a false shortfall in 2003, Sir Alan began seeking out other sub-postmasters and eventually took the Post Office to court.

A group litigation order (GLO) scheme was set up to achieve redress for 555 claimants who took the Post Office to the High Court between 2017 and 2019.

Sir Alan, who was portrayed by actor Toby Jones in ITV drama Mr Bates Vs The Post Office, has called for an independent body to be created to deliver compensation.

He added that promises the compensation schemes would be “non-legalistic” had turned out to be “worthless”.

It is understood around 80% of postmasters in Sir Alan’s group have accepted a full and final redress, or been paid most of their offer.

Read more:
Post Office scandal explained
Who are the key figures in the scandal?

A Department for Business and Trade spokesperson told Sky News: “We pay tribute to all the postmasters who’ve suffered from this scandal, including Sir Alan for his tireless campaign for justice, and we have quadrupled the total amount paid to postmasters since entering government.

“We recognise there will be an absence of evidence given the length of time which has passed, and we therefore aim to give the benefit of the doubt to postmasters as far as possible.

“Anyone unhappy with their offer can have their case reviewed by a panel of experts, which is independent of the government.”

South Western Railway (SWR) has been renationalised this weekend as part of the government’s transition towards Great British Railways.

The train operator officially came under public ownership at around 2am on Sunday – and the first journey, the 5.36am from Woking, was partly a rail replacement bus service due to engineering works.

So what difference will renationalisation make to passengers and will journeys be cheaper?

What is nationalisation?

Nationalisation means the government taking control of industries or companies, taking them from private to public ownership.

Britain’s railway lines are currently run by train operating companies as franchises under fixed-term contracts, but Labour have said they want to take control of the lines when those fixed terms end.

In its manifesto, the party vowed to return rail journeys to public ownership within five years by establishing Great British Railways (GBR) to run both the network tracks and trains.

Transport Secretary Heidi Alexander said renationalising SWR was “a watershed moment in our work to return the railways to the service of passengers”.

“But I know that most users of the railway don’t spend much time thinking about who runs the trains – they just want them to work,” she added. “That’s why operators will have to meet rigorous performance standards and earn the right to be called Great British Railways.”

How will ticket prices be affected?

Labour have argued cutting off payments flowing into the private sector could save the taxpayer £150m a year.

But the government has not explicitly promised the savings made from nationalisation will be used to subsidise fees.

It is unlikely rail fares will fall as a result of nationalisation, rail analyst William Barter told Sky News.

“The government could mandate fare cuts if it wanted to, but there’s no sign it wants to,” he said.

“At the moment, I’m sure they would want to keep the money rather than give it back to passengers. The current operator aims to maximise revenue, and there’s no reason the government would want them to do anything differently under government control.”

What difference will it make for passengers?

Britain’s railways are frequently plagued by delays, cuts to services and timetable issues, but Mr Barter said nationalisation will make very little day-to-day difference to passengers.

There was “no reason to think” the move would improve issues around delays and cancellation of services, he said.

“It’s going to be the same people, the same management,” he explained.

“The facts of what the operator has to deal with in terms of revenue, infrastructure, reliability, all the rest of it – they haven’t changed.”

Which services are being next to be nationalised?

In the longer term, the move is likely to bring “a degree of certainty compared with relatively short-term franchises”, Mr Barter said, noting the government would only want to renationalise a franchise “because in one way or another something very bad is going on in that franchise, so in a way it can only get better”.

It also means the government will have greater accountability for fixing problems with punctuality and cancellations.

Mr Barter said: “If this is the government’s baby, then they’re going to do their best to make sure it doesn’t fail. So rather than having a franchise holder they can use as a political scapegoat, it’s theirs now.”

He added: “In the short term, I don’t think you’d expect to see any sort of change. Long term, you’ll see stability and integration bringing about gradual benefits. There’s not a silver bullet of that sort here.”

Next to be renationalised later this year will be c2c and Greater Anglia, while seven more companies will transfer over when their franchises end in the future.