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Keir Starmer has suspended seven Labour MPs after they voted, against the government, to scrap the two-child benefit cap.
Former shadow chancellor John McDonnell, ex-business secretary Rebecca Long-Bailey, Apsana Begum, Richard Burgon, Ian Byrne, Imran Hussain and Zarah Sultana have been suspended from the parliamentary party.
The move will be seen as a show of strength by the new prime minister after he easily saw off the first rebellion of his premiership, by 363 votes to 103, a majority of 260.
In a bid to head off a larger revolt on the issue, ministers had said on Monday that they would consider ditching the “cruel” policy.
But, just hours before the vote, the new work and pensions secretary Liz Kendall said the government had to do “the sums” before it could commit to abolishing the limit.
Charities, unions and even former home secretary Suella Braverman have all urged the new PM to dump the cap, brought in nearly a decade ago as one of George Osborne’s austerity measures.
The charity Action for Children has called the policy “cruel” and warned it “creates and entrenches” child poverty.
It currently affects 1.6 million children by limiting welfare payments to the first two children in most families.
During the general election, Labour refused to say it would scrap the cap, warning the state of the public finances meant it could not afford to make a pledge which would cost £3bn.
Before the vote, the former Labour leader, now an independent MP, Jeremy Corbyn urged wavering Labour MPs to “stick to your principles, stand up for what you know is right, and be a voice for the kinder society your constituents deserve”.
Another Labour MP Ms Sultana also said she would back the SNP amendment to ditch the limit, adding: “If the Labour Party has a moral mission, it must be to eradicate child poverty”.
Fellow Labour backbencher Mr Byrne also hit out at the policy, telling MPs its “shameful legacy” was an increase in the number of children living in poverty.
They all defied their leader, in just his third week in the job, alongside Labour MPs Ms Begum, Mr Burgon, Mr Hussain, Ms Long-Bailey and Mr McDonnell.
The Independent understands Labour has now suspended the seven MPs, including the man who was its shadow chancellor just four years ago. It is thought the decision will be reviewed after six months.
The move will be seen as a show of force by a new PM determined to impose discipline on his party.
Earlier, Labour MPs had been urged to "vote with their conscience" to support the motion.
SNP Westminster leader Stephen Flynn said: “Scrapping the cap is the bare minimum required to tackle the appalling levels of child poverty in the UK. It is unconscionable that the Labour government is making a political choice to push thousands of Scottish children into poverty by keeping it in place.”
But Kim Johnson, the Labour MP for Liverpool Riverside, who recently told The Independent children in her constituency “can’t wait two years for a decision to be made”, said she had voted with the government “for unity”.
Former Labour shadow home secretary Diane Abbott said she was “horrified” MPs had been suspended for voting against the new government. She wrote on X: “Personal reasons meant I could not be in Westminster this evening to vote against the 2 child benefit cap.
“But horrified colleagues suspended for 6 months for voting against, when removing the cap is supposed to be party policy.”
On Monday, the education secretary Bridget Phillipson said the limit would be looked at “as one of a number of ways” to lift children out of poverty.
But hours later Sir Keir said there was “no silver bullet” to tackle the problem.
He added: “If there was a silver bullet, it would have been shot a very long time ago.”
Ms Braverman has warned the two-child policy is “putting more children and families” into relative poverty.
At the weekend, Labour MP Rosie Duffield warned the two-child cap amounted to “social cleansing” and was an “anti-feminist and unequal piece of legislation”.
“It legislates against women’s autonomy over their own bodies, the exact opposite of anything that could possibly be described as a Labour Party value,” she wrote in an article for The Sunday Times.
