Rachel Reeves has been urged to bloat Britain's benefits bill further after a Cabinet minister said child poverty levels are "shameful". Education Secretary Bridget Phillipson admitted there would be a cost to welfare changes but warned of "serious consequences" if support is not bolstered.

The Chancellor is poised to hike taxes at the Budget this Autumn as she grapples to fill a black hole of up to £50 billion in the nation's finances. But there is clamour among Labour ranks for more spending even as the economy slows down and interest rates on the UK's debt mountain rise.

Ms Phillipson is co-chairwoman of the child poverty taskforce that is drawing up the Government's strategy - due to be published in the Autumn.

The two-child cap was first announced in 2015 by the Conservatives and came into effect in 2017. It restricts child tax credit and universal credit to the first two children in most households.

Another policy, the benefits cap, restricts the total amount of taxpayer-funded support a household can receive.

The Institute for Fiscal Studies has estimated the cost of scrapping both would be around £3.3billion a year.

Reform has backed axing the two-child cap, but the Tories have warned that welfare costs are already spiralling out of control.

Ms Phillipson told Sky News' Sunday Morning With Trevor Phillips: "I'm ashamed of the very high numbers of children growing up in poverty that we see in our country,' she said, adding that bringing that level down was 'what I came into politics to do".

Asked whether the Government would lift the two-child benefit limit she said: "We're looking at every way that we can lift more children out of poverty. That does extend to social security measures alongside that.

"It's not the only way we can lift children out of poverty, and of course, it does come with a big price tag, but we know that not acting also comes with serious consequences and impact too."

Archbishop of York Stephen Cottrell said the failure to tackle child poverty was "deeply shaming for us as a nation" and said the two-child limit was "one of the contributing factors".

He supported suggestions by former prime minister Gordon Brown to back gambling tax reforms and a levy on banks to fund efforts to ease poverty.

The archbishop told Sky News: "It is simply a shameful scandal that in a wealthy country like ours, there are children every day – I mean, thousands of children every day – going to school hungry. They don't have a proper mattress to sleep on, have all the stigma and the life-limiting impacts of poverty. It shouldn't be this way, which I know everyone agrees on."

The Government's promised child poverty strategy was originally expected in the spring but it is now due to be published in the autumn, with charities and organisations working in the sector estimating that more than 100 children a day are pulled into poverty.

Other faith leaders have signed an open letter calling on the Prime Minister and the Chancellor to scrap the two-child limit.

The group of 38 senior figures from different faiths, including former archbishop of Canterbury Lord Rowan Williams, said: "It is hard to conceive of an effective child poverty strategy that does not act on the restrictive benefit cap and end the two-child limit.

"Faith groups have challenged the limit on moral grounds, rejecting the state's abandonment of third and later children, and the poverty this inevitably causes.

"As many charities and think tanks have now shown, ending the two-child limit is also the most cost-effective way to address child poverty. We believe this must be a priority for your Government."

But Shadow Cabinet Office minister Alex Burghart doubled down on his party’s policy to keep the two-child cap on benefits.

Appearing on Sky News’s Sunday Morning With Trevor Phillips programme, Mr Burghart was asked whether he felt “ashamed” after the Archbishop of York Stephen Cottrell said it is “deeply shaming” to keep the two-child cap on benefits that the Tories introduced.

Mr Burghart replied: “No, absolutely not.

“I think that people who are on benefits should have to face the same choices as people who are in work.

“I don’t think that an incredibly expensive extension to the welfare system is what the British people want or can afford at this moment in time.

“But even outside of that, I think in principle, we shouldn’t just be endlessly extending welfare.”

A Government spokesman said: "Every child – no matter their background – deserves the best start in life. That's why our child poverty taskforce will publish an ambitious strategy to tackle the structural and root causes of child poverty."