Seven Labour MPs have had the whip suspended for six months after voting against the government on an amendment to scrap the two-child benefit cap.
Ex-shadow chancellor John McDonnell was among the Labour MPs who voted for an SNP motion calling for an end to the policy, which prevents almost all parents from claiming Universal Credit or child tax credit for more than two children.
Losing the whip means the MPs are suspended from the parliamentary party and will now sit as independents.
MPs rejected the SNP amendment by 363 votes to 103, in the first major test of the new Labour government’s power.
Mr McDonnell backed the SNP motion alongside Richard Burgon, Ian Byre, Rebecca Long-Bailey, Imran Hussain, Apsana Begum and Zarah Sultana.
The rebellion marks another moment of pressure from Labour politicians on the government to scrap the cap.
Kim Johnson and Rosie Duffield were among 19 Labour MPs to sign another amendment calling for an end to the cap – which was ultimately not put to a vote.
Scottish Labour leader Anas Sarwar and Greater Manchester mayor Andy Burnham also backing calls for a change.
The decision is an early show of force from the new government. This is their first rebellion. Even though it is a small one, Labour whips are trying to send a message to MPs that dissent will not be tolerated in votes.
However, there are many more Labour MPs who are opposed to the two-child benefit cap.
Many hope the party will make a decision in the coming months to scrap it.
In a statement on social media, Ms Sultana said: “I have been informed by the Chief Whip and the Labour Party leadership that the whip has been withdrawn from me for voting to scrap the two-child benefit cap, which would lift 330,000 children out of poverty.
“I will always stand up for the most vulnerable in our society.”
The government has said it is not prepared to make “unfunded promises” by abolishing the cap.
Prime Minister Sir Keir Starmer previously said there was “no silver bullet” to end child poverty but acknowledged the “passion” of Labour MPs on the issue.
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