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Seven Labour MPs have been suspended from the party for six months after voting against the government on an amendment to scrap the two-child benefit cap.
Among them was ex-shadow chancellor John McDonnell, who, along with Richard Burgon, Ian Byrne, Rebecca Long-Bailey, Imran Hussain, Apsana Begum, and Zarah Sultana, supported an SNP motion to end the policy.
This policy prevents most parents from claiming Universal Credit or child tax credit for more than two children.
The SNP amendment was rejected by 363 votes to 103, marking the first major test of the new Labour government's authority.
The two-child cap, introduced by the Conservatives in 2017, does not apply to child benefit, which is a weekly payment made for every child.
Removing the cap is estimated to cost the government £3.
4 billion a year, about 3% of the total budget for working-age benefits.
Losing the whip means the MPs are suspended from the parliamentary party and will now sit as independents.
Nearly all the rebels were allies of former Labour leader Jeremy Corbyn, who now sits as an independent MP and supported the SNP motion.
Ms.
Sultana told BBC Radio 4's Today programme that she had not been informed she would lose the whip if she voted for the amendment.
Mr.
Burgon expressed disappointment at the decision, while Ms.
Begum said she voted against the cap because it contributed to rising child poverty and food insecurity in her constituency.
Mr.
Byrne stated that scrapping the cap was the best way to help his constituents living in poverty.
Before the vote, Mr.
McDonnell said he was following Keir Starmer's example of putting country before party.
However, Jonathan Ashworth, a former Labour shadow cabinet member, called voting for the amendment a futile gesture.
He noted that the government had announced a child poverty review and that engaging with this review was the right way to effect change.
The decision to remove the whip is an early show of force from the new government in response to its first rebellion.
Labour whips are sending a message that dissent will not be tolerated.
However, many more Labour MPs oppose the cap and hope the party will decide to scrap it in the coming months.
The Prime Minister pointed to plans to introduce free breakfast clubs in primary schools as evidence of his commitment to lifting children out of poverty.
Meanwhile, five independent MPs, including Mr.
Corbyn, have expressed their support for scrapping the cap and look forward to working closely with the seven suspended Labour MPs.
They welcomed more members in Parliament who are free to speak out against inequality and injustice without fear of repercussion from their party whip.
Kim Johnson and Rosie Duffield were among 19 Labour MPs who signed another amendment calling for an end to the cap, which was not put to a vote.
Several prominent critics of the cap abstained from voting.
Labour veteran Diane Abbott did not participate in the vote due to personal reasons but expressed horror at the suspension of MPs when removing the cap is supposed to be party policy.
Emma Lewell-Buck, who signed a rebel amendment, did not vote against the government because she believed none of the votes would have resulted in scrapping the cap.
She mentioned that there would be an Autumn Budget soon, and she and her colleagues would work constructively with the government to make scrapping the cap part of it.
Despite the rebellion, Sir Keir easily passed the King's Speech.
Labour also defeated an attempt by the Conservatives to insert an amendment promoting Tory policies on defense spending, illegal migration, and cutting inflation.
A Lib Dem-tabled amendment focusing on crises in the health and social care system, sewage dumping, and electoral reform was also defeated.
Labour MPs are not speaking out publicly despite concerns, as some hope mitigations will come in the Budget next month.
The Prime Minister wants to convey that he is solving long-term problems, but insiders point to serious issues he has not addressed.