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The new Labour government will consider scrapping the two-child benefit cap after Sir Keir Starmer came under growing pressure to ditch the “cruel” policy.
Education secretary Bridget Phillipson said the limit would be looked at “as one of a number of ways” to lift children out of poverty.
Her comments came as Labour could face its first backbench revolt over the cap, which affects 1.6 million children.
Charities, opposition parties and some of his own MPs have all urged the new PM to abolish the cap, brought in as an austerity measure under the Conservative coalition government, while the SNP has tabled an amendment to the King’s Speech calling for it to be axed.
Labour refused to say it would scrap the cap during the general election, warning the state of the public finances meant it could not afford to make such a pledge.
In an apparent bid to head off unhappiness among its own ranks, last week the government announced a review of potential policies to alleviate rising child poverty.
Ms Phillipson told Sky News: “Too many young people in our country are growing up in poverty. That number increased massively under the Conservatives.
“There are a range of measures that we will need to consider in terms of how we respond to this.”
On ditching the two-child benefit limit, she added: “Unfortunately, it’s also a very expensive measure, but we will need to consider it as one of a number of levers in terms of how we make sure we lift children out of poverty.”
She also described housing as a “big factor” saying that for “lots of families work doesn’t pay in the way that it should, and … increasingly what we see is that children are growing up in poverty where there is at least one person in that household in work.
“We will look at every measure in terms of how we can address this terrible blight that scars the life chances of too many children.”
Hours later Sir Keir said there was “no silver bullet” to tackle child poverty but “it’s good that we’re having a debate about it”.
He added: “If there was a silver bullet it would have been shot a very long time ago.”
Instead, there was a “complicated set of factors” including pay, benefits, work, housing, education and health “and that is why you need a strategy to deal with it”.
He also acknowledged the “passion” of Labour MPs who may be considering rebelling over the issue.
Introduced by the then-chancellor George Osborne in 2015, the policy limits child welfare payments to the first two children in most families.
The charity Action for Children has called the measure “cruel” and said it “creates and entrenches child poverty”.
The SNP motion, which will be debated on Monday, is thought to be supported by former Labour leader, and now independent MP, Jeremy Corbyn.
It is not yet clear if it will ultimately be voted on, however, a decision that is up to Commons speaker Sir Lindsay Hoyle.
During a debate on the King’s Speech on Monday, Conservative former minister Suella Braverman called on ministers to scrap the two-child benefit cap.
She told the Commons: "The reason why it was introduced in the first place, ie to disincentivise poor families from having more children, has not necessarily worked. The number of children born has remained relatively stable and as the Joseph Rowntree Foundation found, heartbreakingly 43 per cent of those children in larger families are finding themselves in poverty.”
She added: "I believe this cap is aggravating child poverty, and it’s time for it to go. Now I know about the argument ‘don’t have children if you can’t afford them’. For me that’s not compassionate. It’s not fair. It’s not the right thing to do.”
Ahead of the debate, the SNP’s Westminster leader Stephen Flynn said: “The two-child cap was the Tories operating at their worst, so scrapping the cap would deliver on the promise made to the public for real change.”
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.
Downing Street denied the government had changed its position on the two-child cap.
The prime minister’s official spokesperson told reporters: “I think, as the chancellor said on the round yesterday, that they weren’t going to make spending commitments without being able to say where the money was going to come from.
“But that doesn’t mean that we can’t take action to tackle child poverty.”
He also rejected the idea Ms Phillipson had spoken out of turn, saying “nothing’s out of the scope of the taskforce”.
