Anas Sarwar has backed Keir Starmer over Labour’s benefit cap u-turn, despite anger from MSPs and charities. 

The Glasgow MSP warned that immediately scrapping the limit and the rape clause could “spook the markets” leading to a repeat of the catastrophe surrounding Liz Truss’s mini-budget.

He told the Scotsman: "We are not going to be able to fix everything straight away and we’re not going to be able to do everything that we want to do or need to do because of the state of that financial crisis.

"I think having that grown-up approach most people will recognise and appreciate.”

READ MORE: Anas Sarwar under pressure over Keir Starmer 'rape clause' u-turn

In an interview with the BBC’s Laura Kuenssberg on Sunday, Sir Keir refused to be drawn on a number of other spending commitments but was unequivocal on the cap.

“We're not changing that,” he said.

That was despite scrapping the policy being a key vow in the party's 2019 general election manifesto and in his 2020 leadership bid. 

Even just two years ago, the party’s Holyrood manifesto said they would “use the full extent of the Scottish Parliament powers as well as working with UK colleagues to abolish the two-child cap, scrap the rape clause, and make split payments.”

Mercedes Villalba, Scottish Labour’s environment spokesperson, said there was no justification for the change of heart

She told The Herald: “Scrapping it is one of those rare policies that has widespread support across the spectrum: with the public, across civil society, across the party divides.

"It costs relatively little, it tackles poverty head on, in turn improving health and education outcomes. It pays dividends to the economy. It is the right thing to do on every level by any measure.”

The North East list MSP added: "What should Anas Sarwar do? What every Labour member should do: stick to our principles and voice unequivocal support for scrapping the two-child limit at every available opportunity."

READ MORE: Keir Starmer says Labour will not scrap two child benefit cap

The two-child policy was introduced by George Osborne in his 2015 budget. It came into effect in 2017. 

It means that households claiming child tax credit or universal credit are unable to claim for a third or subsequent child born after 6 April 2017.

Earlier this week, the latest statistics revealed that 1.5 million children were growing up in families impacted by the cap.

Children's charities, including Barnados and the Child Poverty Action Group, have said this "tax on siblings" is the "biggest driver of rising child poverty in the UK today."

There is an exemption for families where a child is the result of “non-consensual conception.”

The only way this can be obtained is for the child's mother to disclose their rape to the Department for Work and Pensions.

There were 2,590 households affected by this so-called "rape clause" last year.

IPPR analysis suggests that nearly 80% of families with four children or more are forecast to fall into poverty.

Following Sir Keir’s interview, Chris Birt, Associate Director for Scotland for the Joseph Rowntree Foundation tweeted: "The two-child cap is a stigmatising attack on families struggling to get by. It actively causes child poverty.

"Who is even defending it now? Hard to believe that the politics of 'hungry children are fine with us' loses against 'they’ve modestly upped spending'."

Peter Kelly, Director of Poverty Alliance, has said the two-child cap is the "worst of the welfare 'reforms' of the last 13 years" and that "any politician that claims to care about poverty, about increasing food banks use, about the well-being of kids needs to commit to scrap this terrible policy".

Aberlour Children's Charity pointed to research by the Nuffield Foundation which found that the cap had "contributed to rising child poverty."

"Any govt committed to tackling poverty and evidenced based policy making must scrap these damaging policies to help lift families out of poverty," they added. 

READ MORE: Starmer blasted by Labour MSP over refusal to ditch 'rape clause'

In his interview with the Scotsman, Mr Sarwar said he would “continue to urge” colleagues in the UK party to “move as fast as they can to address the issue of the two child cap.”

However, he added he was “cognisant of the fact that they have to do it within the fiscal rules that are set because we cannot have a repeat of the Kwasi Kwarteng/Liz Truss budget that means if we get it wrong, and we spook the markets, it means higher interest rates, higher inflation and higher mortgage payments for people across the country."

Mr Sarwar said: “I continue to believe that it is a heinous policy that is doing damage to families across the country and that it is exacerbating poverty. I know that my colleagues in the UK party continue to believe that as well.

"But what they are being up front and straight about is we have to look at the financial circumstances that we’ll find ourselves in.

"What they have done is they’ve committed to reforming Universal Credit. They recognise this needs addressed, but what they have not yet done is set a timetable for when that can be addressed because of that economic climate. I think that is a sensible approach.”

The SNP's Alison Thewliss said the party's leadership needed to listen to the charities.

She said: "It's time Keir Starmer and his pro-Brexit Labour colleagues listen to the experts and commit to the abolition of the abhorrent two-child benefit cap.

"Charities right across the UK have rightly condemned this decision, highlighting how cruel the policy is and the impact it has on children.

"If he won't listen to his own MPs and MSPs, surely he will listen to the experts?"