Universal Credit (Removal of Two Child Limit) Bill
Tuesday 3rd February 2026
(1 month, 1 week ago)
Commons ChamberRead Full debate Universal Credit (Removal of Two Child Limit) Bill 2024-26 Read Hansard Text Watch Debate Read Debate Ministerial Extracts
18:59 - The House having divided: - Ayes: 458 / Noes: 104 - Question accordingly agreed to.
Madam Deputy Speaker (Ms Nusrat Ghani)
The reasoned amendment on the Order Paper has not been selected.
The Secretary of State for Work and Pensions (Pat McFadden)
I beg to move, That the Bill be now read a Second time.
Core to our belief is the idea that no one, no matter their background, should be trapped by their circumstances. People should have the chance to make the best life they possibly can. Poverty is a barrier to that ambition, and it makes it much harder for people to achieve their full potential.
This legislation has its roots in the change made during the Conservative years to introduce the two-child limit on support for families on universal credit. Let us be clear at the start about what this was always about. It was never really about welfare reform, nor was it even about saving money. No, this was always, first and foremost, a political exercise—an attempt to set a trap for opponents, with children used as the pawns. This was all about the politics of dividing lines: between the so-called shirkers and strivers, or the old distinction between the deserving and undeserving poor. Politics first and policy second, every time.
Sir Oliver Dowden (Hertsmere) (Con)
The right hon. Gentleman has provoked me into responding. I served in the previous Conservative Government, and I was involved in all those decisions. There was a clear principle behind them: will people take responsibility for their own actions? There are thousands—millions—of people who choose not to have more children because they want to take responsibility for their lives, rather than the state doing so. With this change, the Government are saying to those people, “Not only will the state take responsibility, but you as the individual will have to pay for it through higher taxes.” That is the principle at stake here, and the Government are reversing a clear principled position taken by the last Government.
Madam Deputy Speaker
Order. Before the Secretary of State responds, let me say that there are many colleagues in the Chamber and I can understand how passionate this debate is, but let us try to keep the noise down when colleagues are contributing.
Pat McFadden
The right hon. Gentleman has set out the previous Government’s justification. I am about to explain why that did not stack up at the time, and why it certainly does not stack up after the experience of the policy.
We should begin by considering why no other neighbouring country has this two-child limit. Given that the policy was always primarily about politics, it is no surprise that it did not achieve the objectives that the right hon. Gentleman just tried to set out. The Tories claimed that this would lead to people making different choices about the number of children to have, but that did not happen. The family size premise was itself based on the fundamental misconception that there is a static group of people who are always on universal credit.
Pat McFadden
Not at the moment. This is not a static group; people’s circumstances change, marriages break up, spouses die and jobs can be lost. In fact, around half of the families who will benefit from the lifting of the two-child limit were not on universal credit when they had any of their children. This is not a static group of people, which drives directly at the heart of the argument that the right hon. Member for Hertsmere (Sir Oliver Dowden) tried to make.
Sir Ashley Fox (Bridgwater) (Con)
Twelve months ago, not only did the Government support the two-child cap, but they were busy suspending Labour Back Benchers who voted against it. Can the Secretary of State tell the House what it was about the Prime Minister’s weak position that caused him to change his mind?
Pat McFadden
I will come on to the timing of our decision, and exactly why it is right.
Pat McFadden
Not at the moment.
As I said, around half the families who will benefit were not on universal credit when they had any of their children. These are people who found themselves in need of help long after any decisions about family size had been taken.
No account was taken of the costs of the policy further down the line, such as lower educational attainment, worse mental health and lower earnings, perhaps for the whole of people’s working lives.
Kirsty Blackman (Aberdeen North) (SNP)
Does the Secretary of State regret saying that whether the two-child cap on benefits causes harm is “open to debate”?
Pat McFadden
No, I do not regret anything I have ever said on this issue. All along in this debate, there has been an attempt to divide workers from non-workers—
Wendy Morton (Aldridge-Brownhills) (Con)
On that point, will the Secretary of State give way?
Pat McFadden
I shall if the right hon. Lady shows a little patience.
Around 60% of the families affected by the current policy are in work, and of those who are not working, a significant number are affected by serious health conditions or caring responsibilities—circumstances in which any of us could find ourselves. As I have said, this was never really about work, decisions about family size or saving money; it was political through and through. It was children who paid the price, with 300,000 more of them going into poverty as a result.
Sir Desmond Swayne
It appears that those 300,000 were in poverty a year ago, but the Secretary of State has allowed that to persist till now. What has changed? It is not the fiscal situation, and it is not any room in the benefits budget. This is the Labour equivalent of Project Save Big Dog, is it not?
Pat McFadden
Timing matters, and if the right hon. Gentleman shows a little patience, I will tell him exactly why we have done this in the timeframe that we have.
All the policy did was force more children into poverty, alongside the Conservatives’ other key welfare measure of trapping the sick out of work. Even some voices on the right recognise the damage that this policy did. Former Tory Welfare Minister Lord Freud described it as “vicious” and said it had been forced on the Department for Work and Pensions by the Treasury at the time, and the former Conservative Home Secretary and new recruit for Reform, the right hon. and learned Member for Fareham and Waterlooville (Suella Braverman), has said,
“Let’s abolish the two-child limit, eradicate child poverty for good”.
I do not know whether that is still her position—we will find out at tonight’s vote—but it seems that the party she has now joined wants to restore the two-child limit. Reform is importing not just failed Tory politicians, but failed Tory policies.
Between 2010, when the Conservatives came into office, and the summer of 2024 when they left it, the number of children in poverty had risen by some 900,000. That is something to ponder as Members on the Opposition Benches have their debate about whether or not Britain is broken. If it is, who was responsible? Who designed the welfare system that they tell us on a daily basis is broken? They did. Who broke the prisons system that we have had to rescue? They did. Who shook international confidence in our economy and its key institutions? They did. This is the inescapable problem with the Conservatives’ current position: an attack line that says, “We trashed the country and left you with a terrible inheritance,” might just not be the winning argument they think it is. Let them have their debate about whether Britain is broken while we get on with the task of fixing what they left behind.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
As my right hon. Friend has described, this is a crucial policy, but it is a downpayment on tackling other failures of the former Government, including the poor-quality and overcrowded housing that puts too many children in poverty of situation. Is he proud, as I am, that we now have a Labour Government who are tackling these issues and getting our children where they should be?
Pat McFadden
My hon. Friend is right, and the point she makes is that we also tackle these issues piece by piece and over time.
I turn now to the question that people have asked: “Why not do this right away?” Here is the difference between government and opposition. The truth is that in opposition, it is easy to tally up everything that is wrong with the country and promise to reverse it, but a winning manifesto has to be more than a list of what is wrong.
Pat McFadden
Not at the moment. We spent plenty of time in opposition writing those lists—we had many years to do it—only to see them turn to dust on the morning of an election defeat. Good intentions were written off by the voters because the hard yards of winning their trust on the essentials of exercising power had not been done. Change comes only by earning the trust that is essential to victory, and it is because we did that that we are able to sit on the Government Benches and change anything at all, whether for children, low-paid workers or anyone else.
Our first job when we came into office was to stabilise the economy after the irresponsibility and chaos of the Tory years, and even after my right hon. Friend the Chancellor had done that, change still has to be paid for. That is why she was right to spell out at the Budget that this policy can only be introduced now, and can only be funded through a combination of savings from fraud and error in the benefits system, changes to the Motability scheme, and reform of online gambling taxation.
Wendy Morton
I am grateful to the right hon. Gentleman for giving way. I have tried my best to be patient, as he indicated I should be, but surely he agrees that there is only one way for him to pay for these increases, which is taxes?
Pat McFadden
My right hon. Friend the Chancellor spelled out at the Budget how this was going to be paid for. If the right hon. Lady did not hear me the first time, I am happy to repeat myself: savings from fraud and error in the benefits system, changes to the Motability scheme—which the Conservatives did not make when they were in power—and reform of online gambling taxation.
It was also right that we took the time to do the work on the child poverty strategy, which was so ably co-chaired by my right hon. Friend the Secretary of State for Education. That work meant that the strategy included wider policies on childcare, school holidays help and a number of other measures, as well as those that are in today’s Bill.
The Bill is about ensuring that children have the chance of a better life. It will mean 450,000 fewer children in poverty in the last year of this Parliament and, taken together with the other measures in the child poverty strategy, will lift an estimated 550,000 children out of poverty. This Labour Government will reduce child poverty, just as the last Labour Government did.
Ann Davies (Caerfyrddin) (PC)
I am glad that the UK Government are finally taking action on child poverty and removing the two-child cap on universal credit—a policy, of course, that Plaid has opposed from the start. However, more than one in five households affected by the two-child limit will not benefit because of the cap on benefits. Does the Secretary of State agree that the Government should now lift the benefit cap, so that every eligible household and every eligible child receives the full support this Bill sets out to provide?
Pat McFadden
I remind the hon. Lady that the benefit cap does not apply to families who are in work or who have a disabled child. It is in place, and that approach balances support and fairness without undermining incentives to work.
The Bill removes the need for the vile policy known as the rape clause, which is a feature that we inherited from the Conservative regime. Women will no longer have to relive terrible experiences to get support for their child. For the families who will benefit, this measure will help all children, regardless of the circumstances of their birth. My understanding is that it is the current position of the Conservative party to bring back the limit, and therefore to bring back that provision. Perhaps the shadow Secretary of State, the hon. Member for Faversham and Mid Kent (Helen Whately), can clarify that when she comes to speak, and perhaps Reform Members can clarify their position when they contribute to the debate.
The policy change made by this Bill is not just about the redistribution of money—it is not just about placing children on the right side of an income line in a spreadsheet. It is about changing the story of children’s lives. That is an investment worth making for the whole country. It is about giving children a genuine shot at life, so that they can do well at school, stay healthy, and contribute to their country and community as an adult. That is harder when children grow up poor, as they are less likely to do well at school, with less than a quarter of children in the lowest-income households getting five good GCSEs.
By the age of 30, those who grew up poor are likely to be earning about 25% less than their peers. They are four times more likely to experience mental health problems, with growing consequences for worklessness and for the benefits bill that we are seeing in today’s system. They are more likely not to be in education, employment or training—those numbers grew rapidly in the final years of the Conservatives’ time in power, and they did nothing about it. That is why we are reforming the system by changing the incentives of universal credit, ending a situation in which the sick have been signed off and written off, and increasing support to get disabled people into work. As Sir Charlie Mayfield estimated in his recent “Keep Britain Working” report,
“Someone leaving the workforce in their 20s can lose out on over £1 million in lifetime earnings—with the state incurring a similar cost”
to support them. These are the kinds of consequences that were not thought through when the Conservatives’ policy was introduced, but it is essential that they are part of our debate about changing it.
Investing in children’s potential today is about changing lives through better educational attainment, improved health and a better chance of a decent job. The most radical thing that a Government can do is enable people to change their own story. Our ambitions should go well beyond providing financially for people; they should be about providing the platform for that change, so there is a direct link between this Bill and the other things we are doing. We are providing more help with childcare for working parents in order to make work pay and to ease the choice between looking after children and taking up a job. That is in their interests and in the national interest—why should we lose the talents of those who have children?
The youth guarantee will help the young unemployed with training, work experience and ultimately a subsidised job, so that they know the pride and purpose that comes with having work. That is in their interests and in the national interest. We have more apprenticeships for young people, stopping the 40% decline in youth apprenticeship starts over the last decade. That is in their interests and in the national interest. Better life chances are part of the battle against the human and social cost of more and more young people being signed off sick and declared unfit for work. All these things will become more urgent as the population ages and we need more young workers to support the country. A better start in life is a bond between the generations. A good childhood is in all our interests and in the national interest.
This debate is part of a wider one in politics. In this debate and in others, we have seen a politics of division in this country that wants to set person against person and group against group, and I believe we are only in the foothills of it. We will see more of this division, both home-grown and imported from overseas, becoming ever harsher as it seeks to use rage to fuel itself and to win support. That is the battle to come, not just on this issue, but much more widely—and I want to make it clear today that we set ourselves against that politics, and make a clear and explicit choice to reject it.
Anger and division are not the fuel upon which this country’s future must be built. They will produce nothing. They will solve nothing. Indeed, they will only perpetuate the chaos in the country that people are so tired of. Instead, we embrace the mantle of hope to offer a chance and not a grievance—a society where we help each other up, rather than try to tear each other down, and where we say to those born into poor circumstances, “We will help you be the best you can be, not through altruism, but because we need you, we believe in you and we want your contribution.” That is in our interests and in the national interest. This is the fight to come between these two kinds of politics; that is what the change in this Bill is all about, and it is why I commend the Bill to the House.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the shadow Secretary of State.
Helen Whately (Faversham and Mid Kent) (Con)
Every week, millions of people up and down the country sit at their kitchen table and do the sums to work out what is coming in, what is going out, and what simply is not affordable. Sometimes the conversation may take a more serious turn to one of life’s biggest decisions: “Shall we start a family?” or “Can we afford another child?” Though romantics might love that to be a decision about whether people want the joy of bringing new life into this world, the reality is that many ask themselves, “Can we afford it?” They are not looking to someone else to help them make ends meet or pick up the bill; they are just doing the maths. That is a difficult conversation, but Members have to ask themselves a simple question before we vote: why should people on benefits get to avoid the hard choices faced by everyone else?
Let us be clear about what the two-child cap is and what it is not. The two-child cap restricts the additional universal credit a household can get to the amount for two children, with carefully considered exceptions, such as twins or non-consensual conception. It does not apply to child benefit. It says that there is a limit, and a point at which it is simply not fair to make taxpayers fund choices that they themselves cannot afford to make.
Dame Meg Hillier
What does the shadow Secretary of State have to say to my constituent, who found herself single with three children in temporary accommodation and then moved into a one-bedroom flat? In those overcrowded conditions, her youngest got ill, and she had to give up her good job to look after that child. This Bill is a lifeline for her. She wants to go back to work, but it is difficult. She did not choose to be in that situation—it was not a choice. And, for the record, most of my constituents do not have space for a kitchen table.
Helen Whately
I am sure that all of us in this House care about poverty and children’s prospects, but the answer is not to spend more, to hand out more money and to trap people in worklessness; the answer is to support people to work, and that is exactly the opposite of what the hon. Lady’s Government are doing.
We all know that bringing up children is expensive and important, but when working couples are having to make tough decisions about whether they can afford to start a family at all, they should not be asked to pay higher taxes to fund someone else to have a third, fourth or fifth child. Someone who is in work does not get a pay rise because they have another child. If we are serious about avoiding a benefits trap, whereby it pays more to be on welfare than in work, we should be honest about what happens if we lift the two-child cap. Benefits for individual households will rise by thousands. Nearly half a million households will receive around £5,000 more on average. A single parent on universal credit with five children could get an extra £10,000 without doing any work, taking their household income to more than £45,000, untaxed—people have to earn about £60,000 to get that income from work! Around 75,000 households will get between £10,000 and £21,000 extra as a result of this Bill. For some households, the extra money will be more than a full-time income, after tax, for someone on the minimum wage.
Joy Morrissey (Beaconsfield) (Con)
Does my hon. Friend agree that it is an issue of fairness for the taxpayer if people are working hard in a job but being rewarded less than someone else getting benefits? That is why we need to keep the two-child benefit cap.
Helen Whately
It is exactly as my hon. Friend says. The extra money that some families will be receiving—without even working—would require such a high income to achieve through work. This simply exacerbates the poverty trap.
Several hon. Members rose—
Helen Whately
I will give way to Members on the Government Benches in a moment. I just ask them to think about the implications of the extra money that people will be receiving. Some people will—frankly and factually—calculate that they can boost their income far more by having children than by working. The best way out of poverty will not be work—[Interruption.] Government Members do not like to hear this, but I am afraid it is just rational. The best way out of poverty will not be work; it will be having babies.
I want to address the argument that lifting the cap is necessary because women are not having enough babies. We know that a declining birth rate is a cause for concern, but falling birth rates are driven by many factors, including changes in people’s aspirations, the poor jobs market, the cost of housing and childcare, the penalties that motherhood imposes on careers and the changing nature of 21st-century relationships. Children are important and we need to have more, but the answer to that complex problem is not, “Here’s some cash for having a kid.”
John Grady
We in the Treasury Committee looked at this issue extensively, and I am unaware of any particular evidence that supports the behavioural arguments the hon. Lady is setting out. In any event, why should 95,000 bright and talented children in Scotland be punished by an utterly cruel policy? Is it not fatuous to suggest that people are having children for money, as well as insulting to people in Glasgow and across the United Kingdom?
Helen Whately
The fact is that people do the sums. That is the reality of the world we live in. The hon. Gentleman indicated that he is a member of the Treasury Committee, so he must be interested—even though he is looking at his phone—in these unavoidable questions. Where will the £3 billion to fund this Bill come from? Where will the £14 billion over a five-year period come from? We all know where it will come from: taxpayers—either today’s or tomorrow’s—and the men and women who get up every morning, go to work, pay their bills and do the right thing. In the last Budget, as she knows, the Chancellor made a deliberate political choice: to raise taxes on people who work and save, so that millions who do not work will receive more in benefits. Working families already make hard choices. Many already strive and struggle to live within their means. This Bill asks them to shoulder even more.
Nadia Whittome (Nottingham East) (Lab)
The shadow Secretary of State must know that the vast majority of families in poverty include at least one adult in work. She asks how this Bill is being paid for. Well, it is being paid for by increased taxes on gambling giants. Would it not be more truthful to say that the hon. Lady is on the side of gambling giants rather than children in poverty?
Helen Whately
Unfortunately, the hon. Lady does not seem to understand that hypothecated taxes are not a thing. What she has said simply does not make sense. The fact is that this Bill will cost the Government money, so it will cost taxpayers money, either now or in the future. That is simply the way it works.
Sir Desmond Swayne
We now hear shouts of “cruelty” and “the rape clause”, but I see only one of the seven who were suspended sitting on the Labour Benches. The rest of them kept their heads down and voted to perpetuate what they now call cruelty and the rape clause. How do they sleep at night?
Helen Whately
My right hon. Friend has indeed made a significant point about the strange position in which so many Labour Members find themselves. Having previously voted against lifting the cap, here they are now, delighted about lifting it.
Labour Members say that the Bill will end child poverty. They have read that increasing handouts will decrease the metric called relative poverty. However, relative poverty is a deeply misleading measure. It is not an accurate measure of living standards. It tells us nothing about whether people have enough to live on, or whether children will have better life chances. It can get worse when the country gets richer, even when living standards for the very poorest are rising, and it can look better when people are getting poorer. That is not progress; it is levelling down. Throwing money at one flawed metric is not a strategy. In fact, it risks doing the opposite of what Ministers claim to want, trapping families in long-term dependency rather than lifting them out of it.
There is a proven way in which to improve children’s life chances, and that is work. Work allows parents to provide for their families, to pay the rent or mortgage, to put food on the table and clothes on their children’s backs, to set an example to their children, and to create structure and routine in their households. The Centre for Social Justice has found that children in workless households are four times more likely to be materially deprived, but under this Government the number of children growing up in workless households has risen at the fastest rate on record, and has now reached 1.5 million. Contrast that with our record, Madam Deputy Speaker. From 2014 onwards, the number of children in workless households fell year on year. We lifted a million people out of absolute poverty, including 100,000 children, and we drove unemployment down to historic lows.
Under this Labour Government, unemployment is rising month after month, so, sadly, the number of children in workless households will continue to increase. Inflation is up as well, to almost double the level that the Government inherited. Higher inflation means that the money in your pocket is worth less: in other words, you are poorer. Fewer jobs, more unemployment, a higher cost of living—that is what the Government are doing to people. I say this to them: you do not lift children out of poverty by making the whole country poorer.
Stuart Anderson (South Shropshire) (Con)
I am enjoying listening to Members who say they have met constituents who have suffered hard times. I grew up in hard times, on welfare, through the death of a parent, watching my mum go without food to feed us. There is no possible way, given that the cuts to benefits have been pulled, that the country can afford this. We will have no defence of the realm. South Shropshire residents will start going without. There is no feasible way to fund this measure, whichever way Labour Members look at it. Does my hon. Friend agree with me?
Helen Whately
My hon. Friend has made the important point that no other party in the Chamber seems to realise what a serious financial position the country is in. We have to ask ourselves hard questions about what the country can afford.
Clive Lewis (Norwich South) (Lab)
We on the Labour Benches at least understand the historical consistency:186 years ago the Tories made economic arguments against stopping children being sent up chimneys, and 186 years later they are making the same arguments, about stopping children being put into poverty. Same old Tories, nearly 200 years later!
Helen Whately
If the hon. Gentleman listens to what I am about to say about the back and forth on this policy on his side of the House, he will see that he should think a bit harder before talking about “consistency”.
So what is this Bill really about? If Labour truly believes that lifting the two-child limit is essential to tackling poverty, why did it take the Prime Minister 18 months to do it? Years ago he called the cap “punitive” and promised to scrap it, but then, once he had secured the leadership of the Labour party, he changed that tune. He said that Labour was not going to abolish the two-child limit. His Chancellor, who is sitting on the Front Bench, said that it was unaffordable. Just six months ago, the Government even suspended the whip from MPs who voted to lift the cap, but now that the Prime Minister’s leadership is under threat, it is the end for the cap. How long will it be before he goes the same way? That is the real reason we are debating the Bill today: we have a weak Prime Minister, running scared from his left-wing Back Benchers.
Talking of the left wing, I expect that Labour will be joined in the Division Lobby later by some of the Opposition Members sitting to the left of me. No doubt the Liberal Democrats, the Scottish National party and Plaid Cymru will also be competing to see who can be the most generous with other people’s money. Reform UK has jumped on the welfare spending bandwagon too. You will have noticed, Madam Deputy Speaker, that we have not tabled a reasoned amendment today, not because we think that the Bill is perfect—I hope that is clear—but because any amendment would still leave us with a watered-down version of the cap. Other parties have got in a right muddle on this—one in particular—but to us it is clear and simple: the cap should stay. Anything else is a worse policy. Amending the Bill is not the right answer; the House should just vote it down.
First and foremost, I have argued against the Bill on the grounds of fairness, but there is another reason to vote against it. More than 50% of households now receive more from the state than they pay in. The benefits bill is ballooning. Health and disability benefits alone are set to reach £100 billion by the end of the decade—more than we spend on defence, education or policing. The benefits bill is a ticking time bomb. We have to start living within our means. Other parties are simply in denial about the situation that we face in our country. The Conservatives are the only party that recognises how serious this is. We would not be spending more on benefits; in fact, we have explained how we would be saving £23 billion. We would stop giving benefits to foreign nationals, stop giving benefits for lower-level mental health problems and milder neurodiversity, stop the abuse of Motability, and bring back face-to-face assessments. We would get the benefits bill under control, and back people to work.
Labour claims to be compassionate, but there is nothing compassionate about making welfare the rational choice, nothing compassionate about rewarding dependency over work, and nothing compassionate about saddling working families with higher taxes to fund political U-turns. Outside this place, people can see what is happening. They know when a system is unfair. They know when a Government have lost their way. They know when a Prime Minister’s time is up. Members should not be enticed by his final throws. They should step back and do what is right for the country. They should back people who do the right thing, back jobs and work and lower taxes, and back living within our means and raising the standard of living for everyone, rather than backing a policy that will add billions to the benefits bill and trap parents in a downward spiral of dependency. This Bill does not end poverty. It entrenches it, so we oppose it.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Chair of the Work and Pensions Committee.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Of the measures brought forward in this Government’s Budget last year, the abolition of the two-child limit is the one that most fills me with hope and more than a little pride, so I thank the Government for listening to so many of us who raised this issue as a concern.
As my right hon. Friend the Secretary of State has reminded us, child poverty is not just about children going hungry once in a while, or not being able to buy the designer trainers they want. For every 1% increase in child poverty, more babies die before their first birthday. In fact, this causal link has been quantified, and it amounts to 5.8 additional deaths per 100,000 live births. A baby born into a poor family is five times more likely to die than a baby born into a wealthy one. I ask Opposition Members to consider that when they make their interventions and speeches.
If such children are lucky enough to survive their first year, they will be more likely to suffer poor physical and mental ill health and more likely to end up as an emergency hospital admission. The impacts on their neurological development as they grow are profound. How the brain makes its neural connections changes because of the stress and adversity that children go through. In turn, that affects behaviour, cognitive development and achievements in school. These disadvantages continue into adolescence and adulthood, so every aspect of children’s lives is affected.
We are rightly concerned about the number of young people who are not in education, employment or training, and nearly 1 million 16 to 24-year-olds are NEETs. We must look at the evidence for why that is, not just jump to conclusions for political expediency. There is strong evidence from the UK millennium cohort study that persistent exposure to poverty and childhood adversity, including poor parental mental health, means that such people are five times more likely to be NEET. It is estimated that more than half—nearly 53%—of current NEET cases are attributable to persistent exposure to poverty and childhood adversity. It is not because young people fancy a duvet day, and I really think it is disgraceful that such phrases are repeated in the media. This pattern goes on right through adolescence and young adulthood, and it affects people’s earning capacity, as we have heard.
When in government, the Conservatives were warned repeatedly. I was a shadow Work and Pensions Minister, and I represented the Labour party during the passage of the original legislation, so I know they had repeated warnings. I chaired an all-party parliamentary group that raised the issue, and we engaged with the Faculty of Public Health, which did an impact analysis to identify the harms that would take place. We also did a retrospective analysis to show the damage the policy was having. That legislation introduced not only the two-child limit and the benefit cap, but the benefit freeze—we must not forget the benefit freeze—and the harms those policies have caused to the lives of children, who are now our young adults, are absolutely shameful.
Amanda Hack (North West Leicestershire) (Lab)
This issue is one of the things we have looked at in the Work and Pensions Committee, and the evidence is quite clear that we must remove the two-child benefit cap and enable long-term investment in our young people. Those young people in poverty suffer extraordinarily, and we need to give them better life chances.
Debbie Abrahams
Absolutely; my hon. Friend is a wonderful member of the Select Committee, and I thank her for that. In particular, she is very active on our joint inquiry with the Education Committee.
In the space of the 15 years between 2010 and when we were elected in 2024, child poverty escalated from 3.9 million children, or 29%, to 4.3 million, or 31%. To go back to the calculation at the beginning of my speech, the impact on families that have been bereaved as a consequence of the unfortunate position they found themselves in financially should not be underestimated. Like many of us, I have constituents who have grown up under the clouds and chains of austerity, while clinging on to the hope that things could get better. That hope is why we are here on these Labour Benches, and we know how important what we are now doing is in rebuilding trust with the people who invested their vote in us and trusted us to deliver for them.
I cannot thank the Government enough for doing this, but as has been said, it is a down payment and there needs to be more. We can overturn the horrors of the last 15 years. We have done so in the past, and we can again. We have prepared the ground for a better Britain, and this year we will start to see children and their families flourish, but I recognise that this is only the first step. We are lifting 450,000 to 500,000 children out of poverty, which is fantastic, but that is only about 10% of all the children living in poverty, and we need to have our eyes on the remaining 90%. This is an important first step, but we must say that it is only the first step.
The Chair of the Education Committee, my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes), and I are looking forward to exploring just how we can do more. As I have previously said, we need to be thinking beyond individual departmental budgets. Tackling child poverty needs a whole-system Government approach, which includes how we budget and how the Office for Budget Responsibility scores Budgets. We need to use evidence much better in our policy planning. Our impact analyses are very narrow, and do not reflect how people experience poverty and the impacts that that has not just on the DWP, but on other Departments. That needs to change.
Finally, when unequivocal evidence is presented to us—some of the evidence is only just emerging; the UK millennium cohort study that I mentioned came on stream only in the last six or seven months—it is right that we respond to it. That is a strength, not a weakness, and it demonstrates humility and integrity. Poverty and inequality are not inevitable; they are political choices driven by values, and when the evidence changes, so should our decisions.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. As so many Members wish to contribute, Back Benchers will be on a speaking limit, which will start at five and a half minutes. I call the Liberal Democrat spokesperson.
Steve Darling (Torbay) (LD)
The Liberal Democrats exist to build and safeguard a society that is free, open and fair, and a society in which no one is enslaved by poverty, ignorance or conformity. That is why it is in our DNA to be against the two-child limit. There are 4.5 million children living in poverty in the UK. As somebody with a passion for the future of our children—looked-after children, adopted children and so forth—I know they are the responsibility of us all, and we should have a passion for supporting our youngsters, because children are 20% of our population, but 100% of our future.
We must reflect on the fact that this Dickensian policy of judging families was brought in by the Conservatives. It is judging because, as we have heard, a parent may find themselves in a position beyond their control—when a family member or the other parent is suddenly taken ill or, even worse, dies—and they are left alone to provide for their youngsters in really difficult circumstances. Equally, why should we decide as a society that, because they are the third or fourth child, we value them less? Such a belief seems morally bankrupt. It is so important that we value our children because they are our future. It is also very sad that seven Labour Members had the Whip suspended for doing the right thing and backing the end of the two-child limit.
I want to reflect a little more on what this means in Torbay. I represent one of the most deprived constituencies in the south-west of England. When I visited a school in Paignton, the headteacher told me how children turn up cold, tired and hungry. It has to provide warm clothes for the youngsters, because parents cannot afford them. It has to provide food for the youngsters. The headteacher was taking on the incredible altruism of being a foster carer, so that if a child did need support, she would have the qualifications to step in and support the family in need.
Jennie and I love going to schools, Jennie in particular—the kids enjoy Jennie more than me, I am sure. Having a chat with youngsters about what they like and do not like about living in their town is a special thing to do, whether as a councillor or a Member of Parliament. Usually, one hears about litter, the environment, graffiti, older kids swearing and so on. In Torquay, in Barton Hill academy, what I found really disturbing was how the nine and 10-year-olds were talking about the cost of living crisis. They were worried about mum, who could not quite afford to put enough petrol in the car, and utility bills were worrying their parents. They told me they were not doing so many of the nice things they used to do a couple of years ago, because mum and dad said they could not afford it any more.
Dame Meg Hillier
I thank the hon. Gentleman for giving way. It was, of course, his party, in coalition, that delivered austerity and delivered this policy. Does he have anything to say to the British public about that period of his party’s history?
Steve Darling
I thank the hon. Member for her non-partisan intervention. The Liberal Democrats opposed the two-child limit. We are on the record as doing that and I am delighted we did so. A Joseph Rowntree Foundation report published last week highlights how tackling poverty has flatlined since 2005, so the Liberal Democrats welcome this step forward in ending the two-child limit.
This measure is not just about children; it is about the future of our country and investing in people and believing in them. The Secretary of State alluded to the fact that youngsters have worse education outcomes, higher levels of mental health challenges later in life, and are unable to contribute to society as strongly as they could. The taxman takes less from them later in life, because their jobs are not so profitable.
Tom Tugendhat (Tonbridge) (Con)
I am slightly surprised that the hon. Gentleman is claiming that less is taken off them. Student loans, which could have received this £3 billion that this change will cost, are effectively taxing young people at 70% or 71%. Does he not think that that tax rate is high enough?
Steve Darling
I thank the right hon. Gentleman for his thoughts on that. I remind my colleague that shortly after the coalition Government, the Conservatives stripped away an awful lot of the safeguards around student loans, and that continues. It is not a happy situation for many students up and down the country that the Tories robbed them of those safeguards.
On a visit to Torbay hospital, I spoke to one of its senior directors. She sees her role as extremely important, because it is not just about treating people but tackling deprivation in Torbay. She comes across some patients who believe that a lifespan of up to around 60-something is adequate. That reflects the levels of deprivation in my community, which this measure will help to tackle. It will lift 2,000 children out of poverty in Torbay. We should have high ambitions for our country. As Liberal Democrats, we believe the best days of our country are ahead of us. By lifting the two-child limit, we include more people in a brighter future.
Janet Daby (Lewisham East) (Lab)
It is a pleasure to follow the hon. Member for Torbay (Steve Darling). I appreciate the Liberal Democrats’ support for lifting the two-child limit.
I cannot express enough how delighted I am to speak in this debate, as these changes will make a real tangible difference to the lives of children and families across our country. The cost of living, standards of living and striving to live above the poverty line are a concern, and such a struggle for so many people and families. I campaigned to lift the two-child limit prior to being a Member, and I have done so since becoming a Member. I hear of families with a roof over their head, but no carpet under their feet; a window to look out of, but no thick curtains to keep out the draft. It is miserable when you are cold, poor and uncomfortable, and anything and everything the Government do to make life easier for communities is the right thing to do.
I recently spoke to a headteacher at a local school in my constituency that serves one of the most deprived areas. I found out that teachers are using their own money to buy children essential items, such as sanitary products, underwear and tights. Of course, they need to do that because the children need them. We on the Labour Benches are right: we are compassionate about children, compared with Members opposite. I love and applaud the teachers and the school for their kindness and for the discreet way in which they help children. I applaud all schools that do this for children, but children should not be in that situation in the first place. In Lewisham, we have a shop called the Bank of Things, where secondary school children can receive free essential items such as toiletry products, pens, paper and even school uniform.
At the heart of this issue, I know parents wish to provide for children, but some just do not have the means to do so. In fact, in my constituency, 65% of children living in poverty have at least one parent in work, so this is absolutely not about parents who do not want to work. It is why the broader child poverty strategy is so vital. Increases to the national living wage, strengthening workers’ rights through the Employment Rights Act 2025, expanded free childcare for working parents, reducing the cost of school uniforms, and building more council homes—these measures and more work together to ensure that work pays, and that parents and carers can provide for their families with dignity.
Teachers and school staff are also purchasing lunch for children whose parents cannot afford it, not because they want to but because the free school meals system put in place by this Government, including to all those on universal credit, still leaves some families behind.
This Government’s fair repayment rate policy also supports households with debts, by reducing the maximum amount that can be deducted from universal credit from 25% to 15%. The previous Conservative Government were despicable in their actions and what they launched at children. The two-child limit cap and universal credit payment deductions at 25% were wrong. The Joseph Rowntree Foundation has said that, as well removing the two-child limit cap, a protected minimum floor to universal credit is also needed. That will reverse declining living standards for families with children and get children out of poverty.
Dame Meg Hillier
My hon. Friend rightly highlights that this is partly about the wider structure, and it is also about the number of parents who are in work. Does she not agree that part of our strategy on child poverty is also about supporting parents into better-paid work, so they can continue to support their families and their children?
Janet Daby
My hon. Friend is absolutely correct; it is about supporting parents into better-paid work.
Jim Shannon (Strangford) (DUP)
I commend the hon. Lady. May I put on record my thanks to her for her words, the Secretary of State for his commitment and the Labour Government for bringing this change forward? Some 50,000 children in Northern Ireland, out of 13,000 households, will benefit—out of child poverty and into a better standard of living. That has to be good news. If anybody is against that, there is something wrong with them.
Janet Daby
I thank my hon. Friend—I call him that even though he sits on the other side of the House—for stating that so eloquently and accurately.
This means that the previous Conservative Government got it wrong. I would also add that with rents rising and mortgages increasing, they got it wrong. Who suffers? It is babies, toddlers, primary and secondary school children, and that is wrong. Unlike the previous Government, this Government accept the overwhelming scale of this challenge. I am sure that Ministers will agree that more still needs to be done.
To bring further reality to the situation, my own son has paid for a schoolfriend’s lunch on more than one occasion when they have not had enough money on their lanyard. I am sure that many other children also share food with their friends because they have compassion and do not want their friends to go hungry.
I welcome the Government’s decision to lift the two-child benefit cap, which will provide crucial support to an estimated 3,530 children across my constituency. It is a significant step and I commend the Government for taking it.
Breakfast clubs are absolutely fantastic, but they are limited to primary schools, meaning that secondary school children miss out. There could be three children from the same household where two children receive breakfast at primary school but the other goes hungry at secondary school. That is not right. Parents should not have to worry about their ability to feed their children and teachers should not have to subsidise parents or the state by feeding their pupils.
As I come to an end, I must mention the remarkable football player Marcus Rashford, who knew what it was like to go hungry as a child and is now dedicated to ensuring that it does not happen to other children. I respect his efforts to reduce child poverty. I ask this Government to make the necessary effort to keep children out of poverty and to support them to ensure they have a full stomach and reach their full potential in life.
Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)
At its heart, this debate is about choices, and the choice before us today is whether we believe that compassion is best expressed through limitless expenditure or through a system that is fair, responsible and worthy of the people who fund it. We in this House all share the same objective: we want every child—[Interruption.] Well, I hope we do, because we want every child in every corner of this country to have hope and opportunity in their future. If we are truly honest, a good society is measured not by how much it spends, but by how wisely it spends, and that is where the Bill does not meet the test before it.
Dr Shastri-Hurst
I will make some progress.
I will start with a real-life experience from my own constituency. Some months ago, I met a couple at a community event, both of whom were in work and clearly raising their children with a great deal of pride and care. They spoke to me with a quiet determination about the sacrifices they were forced to make: no foreign holidays, no luxuries, often working long hours and, of course, careful budgeting of the household income. Their message was that they did not expect the state to intervene on their behalf; they were not asking for anything special. Instead, they were merely asking for fairness, and fairness is what is at stake today.
The two-child limit rests on the simple principle that the welfare system should reflect the real choices faced by working families up and down the country. Across the United Kingdom, parents weigh responsibility against aspiration every day, asking themselves whether they can provide, whether they can sustain and whether they can provide their children with security.
Debbie Abrahams
The hon. Gentleman just spoke of whether or not the expenditure was wise. He also spoke about choices. I do not know whether he heard my speech, but children who are born into poor families are five times—five times—more likely to die just because they are poor than children in families with a little more income. Is it fair to a child if they die just because they were born into a poor family? I cannot understand the hon. Gentleman’s logic.
Dr Shastri-Hurst
I thank the hon. Lady for her intervention, but this is about choices. We come to this place to make choices about how we spend taxpayers’ money to ensure that it is fair across the board. We can all bring moving individual stories, but there is the reality of how we support Government expenditure across the board so that it is fair and equitable and ensures that families up and down the country are having to make similar choices every single day.
What this Bill tells the country is that choices no longer matter. It tells the taxpayer that restraint is optional. It tells Government that limits are now outdated. The Government say that the Bill will reduce child poverty—I understand that, and I respect that intention—but poverty is not conquered by cheque books alone. It is conquered by work, education, stability and ambition. It is conquered when families are supported to stand tall instead of being encouraged to lean forever.
For far too long, politics has fallen into the trap of believing that every social problem has a fiscal solution—if only we spend more money, subsidise a little more or borrow more—but history teaches us a much harder lesson. A society that confuses help with dependency does not liberate the poor, but simply imprisons them.
The Bill will cost approximately £3 billion a year, which will be paid not by abstractions, but by people—by the nurse working a night shift, the self-employed plumber, the shop worker who is saving for a deposit or the small business owner who is keeping three other people in employment. Those people are entitled to ask whether this is fair. Is it fair that they have to calculate every single pound while the state abandons calculation altogether? I simply do not believe it is.
Dame Meg Hillier
My right hon. Friend the Secretary of State for Work and Pensions made clear in his speech the number of people who make these choices and decisions and then, later on, find themselves on universal credit through changes in circumstances. This is a safety net. It is not the position of Labour or the Government that people with children should not work and should not be supported into work; that is very much part of the equation. Will the hon. Gentleman reflect on that and think about what happens when people’s circumstances change? This is a safety net—a leg up—not a handout.
Dr Shastri-Hurst
It would be a safety net if it provided a short-term boost. What it does instead is provide an endless cheque book without any checks and balances in place. If there was a sunset clause, that would be different, but there is not.
The two-child limit was about more than blame; it was about balance. It recognised that a welfare system without boundaries eventually loses legitimacy altogether, and when legitimacy is lost, discourse soon follows. That is the great unspoken risk of this Bill: it does not merely expand spending, but weakens trust; it widens the gap between those who give and those who receive and, in doing so, puts the whole settlement at risk.
What is fundamentally missing from this Bill is any serious strategy for mobility. Where are the plans for skills, for progression, for family stability and for moving people from welfare into work? Instead, the Bill simply offers the politics of reassurance without reform, comfort without challenge, spending without strategy and debt without direction.
The Conservatives recognise the importance of lifting people up, of not holding them down and of providing opportunity and not permanent subsidy. The true measure of social justice is not how many people we support, but, crucially, how many people we no longer need to support. The question before us, therefore, is whether we will tackle poverty at its root or merely manage it year after year; whether we will build a system that strengthens families or one that substitutes for them; and whether we will choose the easy road or the responsible one. This Bill chooses the easy road—it chooses sentiment over structure, expansion over reform and today over tomorrow. I simply cannot support that choice.
Kim Johnson (Liverpool Riverside) (Lab)
I really believe the shadow Chancellor, the right hon. Member for Central Devon (Sir Mel Stride), and other Opposition Members live in an alternate universe, because they are totally detached from the reality of my constituents in Liverpool Riverside.
It is with great pride that I rise today in support of our Bill to lift the two-child cap—a campaign that has long been close to my heart. Lifting half a million children immediately out of poverty has to be a great thing for this country. As the MP for Liverpool Riverside, I have had child poverty at the top of my agenda since coming into Parliament over six years ago.
Kim Johnson
No, thank you.
It saddens and appals me that, in the sixth richest economy in the world, one in every two children in my constituency lives in poverty. That is a statistic that should shame everybody.
It is a shame that it has taken so long to reverse the draconian cap that was driving hundreds of families into poverty every single month. Children’s charities and organisations, the Children’s Commissioner and politicians of every background were united in calling for that as their No. 1 priority for reversing trends in child poverty, which exploded, as we all know, under the Tory austerity measures. The facts are clear and indisputable.
I pay tribute in particular to the End Child Poverty coalition, co-ordinated by Rachel Walters, the Child Poverty Action Group and the National Education Union, which I have worked with closely throughout my time in Parliament to champion support for children living in poverty and, in particular, to campaign against the two-child cap. Without their incredible work to make it impossible for this Government to ignore the necessity of lifting the two-child cap, I fear it may never have happened. I also pay tribute to the schools in my Liverpool Riverside constituency, which go over and above every single day to support children and families who are living in poverty.
I take this opportunity to highlight research by the Joseph Rowntree Foundation, which estimates that 1.5 million children in families with migrant parents live in poverty. That makes up over a third of the total number of children living in poverty. In large part, that is driven by the no recourse to public funds policy, with half of the children living in families that fall under that policy living in poverty. Research by the Institute for Public Policy Research also shows that those children face a far higher risk of very deep poverty.
As the Government have laid out in today’s debate, no child should have their life opportunity limited by the conditions they were born into. It therefore follows that we must go further to alleviate child poverty and row back on the policies, such as no recourse to public funds, that still play a major role in systematically driving large numbers of families into poverty.
Before I came into this place, I worked for the Department for Education supporting the development of Sure Start programmes across the north-west. I know at first hand the difference that supporting a young family can make to those children’s life chances and the benefits of early intervention and integrated provision. It is a record that Labour is rightly proud of, but one that should spur us to recreate and go even further now that we are in government again.
Lifting the two-child cap in full is a brilliant win for our campaigners and will be life-changing for millions of children who need the extra support to achieve their full potential. It will be a major boost for local economies, putting money immediately and directly in the pockets of families who will go out and spend it productively. I am proud to be part of a Labour Government who have taken such a bold and vital step, but now we need to go further in redistributing the vast wealth that this country has to ensure that our communities can flourish and no child is left behind. Fourteen years of the Tory austerity tax on living standards and the systematic dismantling of our public services needs to be met with a bold Labour programme of taxing wealth, renationalising our public services and providing them with proper funding.
We still have children who are growing up with diseases that we thought had been consigned to the Victorian era, including rickets and scarlet fever, made possible by a crisis in child poverty and malnutrition. Lifting the two-child cap is a good start, but Labour cannot be complacent about the monumental challenges that we face in government to boost living standards, tackle inequalities and start putting power and wealth back in the hands of working people. Poverty is a political choice; it is about choosing the interests of the many over the influence of the few. I am proud that we made the right choice.
Dr Luke Evans (Hinckley and Bosworth) (Con)
Fairness matters, not only to those receiving the support but to those making the difficult choices without it. During the short time I have, I will talk about the principles and then the context.
I come to this subject thinking about the publican in my constituency who has two children and who wakes up in the morning, leaves their house in Barwell and goes to their business. They have seen their national insurance contributions rise, their valuation has changed and the tax has gone up on that, the rate relief has been withdrawn from them and they have seen the minimum wage go up. Those are all costs that they are having to consider. What about the independent pharmacist on the high street, who gets up and goes to work in Hinckley, having to face the fact that national insurance contribution costs are going up?
Sam Rushworth (Bishop Auckland) (Lab)
The hon. Gentleman mentions the local pharmacist. The local pharmacist in my constituency is my twin sister. She put herself through a degree in pharmacy while on universal credit as a single parent of three children. That was not her choice; it was a position that was thrust upon her. What would the hon. Member say to people like her?
Dr Evans
I would credit her. She is a credit to the hon. Gentleman’s family for what she has managed to achieve.
The key point I am trying to get to is that, when those people leave their doorstep, is it fair that the choice they have made to have only two children is simply thrown out the window, because an extra £3,650 is now being given to the parent of the third and fourth child next door, simply for not going to work? That is not fair, and that is the heart of the principle.
At the end of the day, the welfare state works best when it is a bridge to work and not a substitute for it. We have often heard about the working poor.
Clive Lewis
I am listening to the hon. Gentleman. Conservative Members always seem to portray this as an individual moral failing. That is how they see welfare, when actually it is about a collective insurance against economic risk. That is how we see it. You see it as a moral issue; we see it as an economic one.
Madam Deputy Speaker (Caroline Nokes)
Order. It is not me who is being referred to; it is the hon. Gentleman.
Dr Evans
That is far from the truth. I am simply arguing that we need to be fair to those who need the system to support them and those who contribute to it. I worry that we are pulling at the fabric here.
It is interesting that the debate in the House is slanted towards the Labour view, because they have the numbers. If we look at the public polling, however, we know that, consistently, 60% of the public support the cap and only 30% want it to be taken away. Why is that? Fundamentally, they understand that there has to be give and take. The worry here is that someone will suddenly get £3,650 with no contractual change within society to better themselves.
The money could be better spent. To take an example from the last Government, in 2021 they changed the UC slider from 63% to 55% to encourage work. That cost about £2.5 billion; we are talking about £3 billion today. We have heard from the Government how this will be paid for. It is not hypothecated. The pharmacist I was talking about and the sister of the hon. Member for Bishop Auckland (Sam Rushworth) will pay for this, as will the publican who goes out to work. They will see their taxes rise. That is the contract that I am worried about.
Joy Morrissey
It is an issue of fairness. The people of Beaconsfield, Marlow and the south Bucks villages have seen their taxes go up and they are seeing those taxes being given to people who are not working. It is unfair.
Dr Evans
That is exactly right. The public will stand for a generous safety net, but they will not stand for people not trying to take things forward. I worry that, despite this Government’s talk of employment rights, the chances for employment and the working poor, more people are out of work under this very Government due to the choices they are making. That is fundamental to today’s debate, and trying to leverage morality into it misses the reality of responsibility. Every family in this country make fiscal choices and expect to behave responsibly, and so should the Government who lead them. That is the crux of the matter.
In the time I have left, I will move on to the context. If this were a moral crusade, as we have heard the Prime Minister say, he would have done it in his very first Budget; he would have made that choice. However, as we have heard from other Members, when this policy was put forward after the new Government came in, 40-odd MPs did not vote and seven Labour Members had the Whip removed.
If we are talking about poverty, one thing that has not been raised in the debate so far is the winter fuel payments policy. The Government’s own analysis said that it would put 50,000 pensioners into absolute poverty and 100,000 into relative poverty. So there is a dichotomy here, and it is about choices. Government Members seem to say that if we are going to solve poverty, we need to focus on one area, yet they all voted to take the fuel payments away—[Interruption.] I hear chuntering from the other side about means-testing, but that did not happen until later when there was a climbdown.
The key thing is that these are difficult choices that have to be made. I worry that the public see straight through what is going on. They need fairness in the system. They do not need a vote to be held to try to placate the Back Benchers of a failing Prime Minister. If this truly was the mission of the Prime Minister at the start, he would have done it straightaway.
Dame Meg Hillier
Let us be clear: this Government came in with a plan to tackle child poverty, but quite rightly set up a taskforce to deal with it under two excellent Secretaries of State, and now with my right hon. Friend the Minister for Social Security and Disability at the helm as well. That is why this policy has happened now and did not happen immediately. It would have been a bad mistake to have dealt with this in a piecemeal fashion. Instead, we now have a whole strategy, of which this is a part, as is helping parents into work.
Dr Evans
Why, in that case, was the Whip removed from Labour Members? Why is there no contingency in the Bill to ensure that someone is progressing through the system? We have heard time and again from Members on both sides of the House that it is not only a safety net but a springboard. I come back to my point that if the Government want to make a difference, they could change the rating on universal credit to encourage more people into work, but that is not happening. That would help to support people who are in work but who are impoverished. The last Government brought in the household support fund to ensure that there was immediate support. I am pleased that the Government are bringing forward some form of contingency, but we still have not seen what that looks like. That will be a concern for people.
I shall end where I began. This system has to be fair to those who are getting the support, but also to those who are paying for it. At the end of the day, a family lives within its constraints and so should a country. This Bill does nothing but the opposite, and that is my concern.
Fleur Anderson (Putney) (Lab)
I am very proud to support the Universal Credit (Removal of Two Child Limit) Bill. It will tackle child poverty and restore basic fairness to our social security system. I, like many other Labour Members, have been campaigning on this issue since I became an MP. I thank the Child Poverty Action Group and the Trussell Trust, as well as the food bank volunteers who have been in to lobby me about this issue for a very long time. This win is for the families in my constituency who I see in my surgeries and in their homes. I think of one family who literally move a light bulb around from room to room because they are so scared of the cost of using additional electricity. That is just one example of the real impact that poverty has on a family.
I am glad that we are dismantling this cruel and unfair policy today, and that we are continuing the job of fixing a broken system, set up by the Conservatives, that has led to children not having the basics or the opportunities that everyone in our country should have. Six months after this policy was brought in nine years ago, the UN special rapporteur on extreme poverty, Philip Alston, visited the UK and produced a report on the poverty levels that he found here. He said that we had a
“punitive, mean spirited, and often callous”
benefit system and that the high levels of child poverty were not inevitable but a “political choice”. That was back in 2018.
Every single day since the Conservatives forced this two-child benefit cap through, 109 children have been pushed into poverty, not because of anything they or their parents have done but because an arbitrary policy denied them the support they need. It was always indefensible. Because of the failings of the Conservative Government, child poverty in the UK has risen faster than in 37 other high-income countries over the past decade. That is a national disgrace.
Removing this limit will lift 450,000 children out of poverty by 2029. That is what real, measurable change looks like. I was on the child poverty taskforce for over a year, and we really drilled down into what could make the most difference. Scrapping the two-child benefit cap was always at the top of the measures. I am proud that our strategy also brings in many other ways in which we can support families.
We know who is being hit the hardest by this policy, with 68% of the families affected having a child under five. The early years shape everything that follows: health, education and life chances. Inequality in childhood becomes inequality for life. This Bill gives us the chance to break that cycle. The latest universal credit data shows the scale of the damage. In April 2025, 700 households in Putney were denied a child element for at least one child because of this policy. That meant that 900 children received no support and 2,490 children in total were living in households hit by the two-child limit. Across Wandsworth, the picture was even starker, with 1,820 households affected, 2,330 children denied support and a total of 6,540 children living in households impacted by this cruel rule.
It is a rule based on the fiction that families in poverty plan before they have children—that they plan ahead to be in poverty for the long term and decide on the number of children they will have in their loving family on the basis of that—rather than a policy that is there for families whenever they are in real need. We have got those parents’ backs and we have got those children’s backs, no matter what number they come in their family. Scrapping the two-child limit will be transformative for those families and for their communities. It will change whole disadvantaged communities in my constituency, across London and across the United Kingdom, who all currently pay the price for the high numbers of children in poverty, whether those children are in their own family or not.
The Bill is part of this Government’s wider mission to build a fairer country; to support, not penalise, families; to support parents into secure and better paid work; to deliver more affordable homes; to cut the cost of living; and to give every child the best possible start in life.
Carla Lockhart (Upper Bann) (DUP)
I commend the hon. Member on her speech. Evidence shows that the two-child limit has not changed fertility or employment but that it has coincided, sadly, with a disproportionate rise in abortions among mothers with two or more children. Does she agree that removing the two-child limit will better support mums and help to ensure that no woman feels pushed towards an abortion because she cannot afford another child?
Fleur Anderson
The hon. Member highlights one of the many painful decisions that people have to make on the back of this policy, such as decisions about heating or eating and about what to do in their families. She also highlights the fact that the whole of Northern Ireland will benefit from this Bill as well. We need to bring every child across the whole of the United Kingdom up, and lifting this policy will do that. It is fair across every part of the United Kingdom for all the families who are affected. I thank her for raising a different aspect that this policy has introduced.
I am proud to support the Bill, and I urge Members across the House to do the same.
Kirsty Blackman (Aberdeen North) (SNP)
I will touch briefly on the Conservatives’ position and then turn to the Bill itself.
The Conservatives have at least been consistent on this policy—consistently cruel. I would point out the level of detachment with the reality faced by so many families in my constituency. The reality for such a high percentage of families is they do not choose whether to have children. They do not sit down and work out whether the money adds up. The reason that the rape clause is in place is because so many people are not able to make those choices. People do not set out with an intention to have a certain number of children; it is about what happens in the circumstances that are created.
Kirsty Blackman
I will not.
The reality is that the Conservatives’ position is a very entitled, privileged one, and it does not reflect the majority of our constituents.
Kirsty Blackman
I said I would not give way.
Let me turn to where we are today. The Labour party is being a bit smug about the position we are in. The SNP has been absolutely consistent in calling for the removal of the two-child cap. Alison Thewliss stood in this Chamber and highlighted the rape clause at every possible opportunity; I think people got fed up with her talking about it so much, but she was one of the people leading the charge. On that note, I thank those Labour Members who did back removing the two-child cap at the earliest opportunity. I understand how difficult it is to do that, and I appreciate that they were willing to put their principles first.
Today is a good day because the two-child cap is being cancelled. I am sad, though, that the Secretary of State said that he does not regret anything he has said before on this. That means he does not regret saying that it is “open to debate” whether the two-child cap causes harm, despite the fact that he is now saying absolutely the opposite.
I am glad that the Government are finally scrapping this policy. Children should not be at the sharp end of Government decisions, just as older people whose winter fuel payment was scrapped should not be at the sharp end. None of them is able to take these decisions on their finances. None of them can work a few more hours: a six-year-old cannot do that; a pensioner cannot just work a few more hours, because they may be significantly over the pension age and unable to work.
We need to recognise what has been said by a significant number of Members today, which is that so many of these families are in work. People are working hard; it is just that work does not pay—it does not pay enough. If we look at the stats, we see that people feel that the social security system should provide enough support for people to be able to live. We know that people living on universal credit—particularly large families—cannot afford the essentials, even if they are working. That is what this debate is about: giving people the best chance in life.
The Government, however, are not going far enough yet. The strategy that came out of their child poverty taskforce was simply a reiteration of many things that had already been announced. It was a summary: “Here we are. Here are all the things we have announced already as a Government.” It does not have the ambition we need in order to see child poverty tackled. If we look at the stats, we see that the rate of children in poverty by the end of this Parliament will be exactly the same as it is now. This measure will not reduce child poverty over the piece; the same percentage of children will be in poverty as are in poverty now, because the Government are failing to have ambition.
The UK Government should look at the Scottish child payment, as I asked them to do the other day. They should look at the amount of additional money being provided, particularly as of next year, to families with children under one, in recognition of the difficulty and importance of those first 1,000 days. They should look at those uplifts to ensure that people are taken out of poverty, at the baby box, at the Best Start grants being provided to families, and at the tackling child poverty delivery plan that the Scottish Government will bring out in March. Unlike the UK Government’s paper, which simply lays out a number of great things that the Government say they are doing, we have targets in our plan; We are looking at the actual difference that each of our policies make. I urge the UK Government to look at what is being done in Scotland and at the fact that child poverty is lower in Scotland than in any other part of the UK, and to consider what can be done to ensure that children have the best possible start in life, whether they live in England, Wales, Northern Ireland or Scotland.
Douglas McAllister (West Dunbartonshire) (Lab)
I rise to support the Bill and do so proudly on behalf of the families I represent in West Dunbartonshire. The two-child benefit cap makes poor children poorer. It punishes children for their circumstances and it has no place in our United Kingdom. Tackling child poverty is a proud Labour tradition and one that this Government have been proactive in pursuing from the very outset. This will deliver the much-needed change that we promised to my constituents.
West Dunbartonshire is a constituency with pockets of significant deprivation, but it is also one that is built on a proud legacy of hard work, fairness and a strong sense of community. For too long in my constituency, too many families have been held back by the two-child benefit cap—a policy that does not reflect my values. It is where I live, and it is where I want our children and young people to succeed. By scrapping the two-child limit, we will directly benefit 2,260 children in West Dunbartonshire. Last year, over 4,500 children in my constituency were living in poverty, and despite the claims of those who oppose the Bill, more than 60% of those households with children in poverty are working families. I see parents turning to food banks not because they have failed, but because the system has failed them.
In some parts of West Dunbartonshire, over 65% of people are living in relative poverty. In 2024, this meant that eight children in every classroom of 30 in my constituency were growing up in poverty, while more than 12,000 households struggled with fuel poverty. Those figures underlie why the Bill will make such a difference. There are many families in my constituency that struggle every single day to make ends meet, and I see children starting life on the back foot through no fault of their own. My wife works in education, and for many years she worked in a primary school in my constituency where it was common for children to arrive hungry, having had nothing to eat at home.
I remind the House that these are not just statistics. These are children skipping meals and living in cold, damp homes because their families cannot afford to buy sufficient food, never mind pay the heating bill. These children are the next generation in West Dunbartonshire, and they should not be denied the same opportunities as others. Every single child matters.
At the heart of Labour values is an inherent belief that background should not be a barrier to success, and the removal of the two-child limit is a clear and welcome expression of that commitment. This is the change that we promised and it will make a real, tangible difference to so many families in my constituency. The removal of this limit is only part of this Labour Government’s plan for change, and for tackling poverty in a sustained way. The Chancellor’s decision to reduce the level of debt repayments taken from universal credit means that 1.2 million of the poorest households keep more of their award each month. This is a straightforward change, but one that will have a real impact on family finances in West Dunbartonshire.
The Budget delivered record additional funding for Scotland, which will create opportunities to improve outcomes for families and children in places like West Dunbartonshire. However, it is disappointing that the SNP has too often failed to match increased resources with effective delivery when it comes to tackling child poverty in Scotland. Education is the quickest route out of poverty, but in my constituency and across Scotland, the educational attainment gap continues to widen. Meanwhile, further education colleges are being starved of funding, further undermining the life chances of young people in West Dunbartonshire. Removing the two-child limit is the right thing to do. It will give children a better start in life, regardless of how many siblings they have. This will increase their life chances. Not only that, but the decision will also ease the strain on our schools, our local charities and the NHS, and will therefore benefit all in society.
The solution to fixing the welfare system cannot be found in punishing those most vulnerable in society. Social security should provide stability and dignity for everyone, especially children. The Bill is essential to helping alleviate some of the burdens and daily struggles that families in West Dunbartonshire face, and it will lift 450,000 children nationally out of poverty by 2030. I was elected on a manifesto commitment to improve the life chances of every child, and supporting the Bill is consistent with that commitment. Labour has always stood for communities like West Dunbartonshire. Children are not a burden and poverty is not inevitable. I am proud to support the Bill and what it represents—hope, opportunity and fairness—and I commend it to the House.
Tom Tugendhat (Tonbridge) (Con)
I have heard so many well motivated and moving stories about human misery, and the truth is those are the stories of our country. Those are the stories of a country that has tried for over 100 years to introduce a social welfare service to look after the poorest in our community and to do the best for them, and, in various different ways, all of us—and I do mean all of us—seek to do that. We may have different expressions and different understandings of quite how that works, but we do all try to look after those who are most vulnerable in our society.
But I think the division here comes in a very fundamental way, and it comes in the questions that one has to ask oneself when one looks at the way in which this economy, this society and this community grow. When I say economy, I mean not just the bald rows of figures that accountants and bankers add up, but the way in which the Greeks meant it: the way a home works together, the way people interact to bring about a community and to bring about a whole. How does that work? How do we get growth? How do we get investment and reward at the right point so that we actually see the progress that society can bring?
We have seen societies, time and time again, doing the well-meaning thing, and ending up costing everyone. We can read the constitutions and the promises of Governments and nations over the last century and see the human misery they led to—not because they were evil, but because those intentions were not aligned with the reality of a human economy. We have seen it time and time again.
Sadly, although we are now having a debate about the two-child benefit cap and about £3 billion, we are really having a debate about what it means to grow an economy. Although the Liberal Democrat spokesperson, the hon. Member for Torbay (Steve Darling), made a joke out of it, the reality is that we are seeing young people paying something like 70% tax—and some are therefore making the choice to go to Dubai, to Portugal, to the United States or to Australia. That connection between young and old people is being broken, with families left in need of not only the economic connection but of the human connection between them.
Dr Scott Arthur (Edinburgh South West) (Lab)
Will the right hon. Member give way?
Tom Tugendhat
I will not.
This debate is not just about cash; it is fundamentally about people. There has been an attempt again to pretend that the only interaction between people is that which is metricked, divined and organised by the state, and that simply is not true. It simply is not true to say that, unless the state provides it, it does not count. Yet, again and again, we hear the same thing.
Yes, I know that the Conservative Government left taxes high, but many people seem to have forgotten that covid seemed to increase the debt enormously, and that when some of us tried to vote against various lockdowns, we were accused of murdering various groups, depending on whoever the then Leader of the Opposition seemed to be siding with.
Several hon. Members rose—
Tom Tugendhat
I have said I will not give way. It is true that what we are seeing in the UK today is a legacy: of poor decisions on covid that some of us condemned at the time; of promises made in the last year or two; and of debts to those who challenged leadership in the last six to 12 months. We are now seeing, falling on those who are working, a level of burden that is growing and growing, and people are voting with their feet, either by not working or by leaving.
I am afraid that what we are seeing here is a false choice. We are seeing a Government making promises that will never be able to be cashed. We are seeing a Government adding to a debt, not of £2 trillion—the one that they state—but of £12 trillion or £13 trillion, depending on how we count pension liabilities, private finance initiatives and many of the state’s other debts.
The reality is that this country is broke, and to a degree that nobody in this House seems to appreciate—certainly nobody on the Government Benches. We simply do not have the understanding here, among the noble and well-meaning socialists, that the reality is that they are racking up debts for their children that will mean that this state will be impoverished, we will be left weaker and the whole country will be poorer.
Helen Hayes (Dulwich and West Norwood) (Lab)
Child poverty is a scourge on any society. It is a tragedy for individual children and families, and the untapped potential, worse health and lower attainment resulting from it hold the whole of society back. In the fifth richest economy in the world, it is also inexcusable. Under 14 years of Conservative-led Governments, the number of children living in poverty grew and poverty deepened, compounded by a housing crisis unprecedented since the second world war, the growth of insecure, low-paid work, and the imposition of the two-child cap.
Action for Children estimates that 4.5 million children are living in poverty in the UK. That is three in 10 children—on average, nine in every classroom. Seven out of 10 children who are living in poverty have at least one parent in work. Behind those statistics are children without a bed to sleep in; children without enough nutritious food to eat; children without warm clothes in winter, living in cold, damp, mouldy homes; children who lack the basics to nurture their growth and development, who are disadvantaged before they even set foot in a classroom.
This situation is not an inevitability. It has come about through the deliberate political choice to prioritise the rhetoric about the benefits system and the stereotypes about the families who rely on it, rather than looking at the evidence and the reality of people’s lives. The Child Poverty Action Group’s analysis of DWP data finds that 1.6 million children have been directly impacted by the decision to impose a cap, above the first two children in a family, on the social security measure that specifically supports families to care for children. Some 59% of those children have parents in work.
The two-child cap has directly pulled 350,000 children into poverty. It is a measure that effectively punishes children for the number of siblings they have. One of the reasons I joined the Labour party many years ago is that we believe that every child deserves to have the opportunity to succeed. We do not judge children on the circumstances of their birth or the decisions of their parents. I am therefore delighted that the Government are taking action to remove the pernicious two-child cap and to lift 400,000 children out of poverty.
Jeremy Corbyn
I absolutely welcome this Bill. It is an enormous step forward and will bring great relief to a lot of families. Does the hon. Lady recognise that the continuation of the overall benefit cap will mean that about 150,000 children will not benefit from this Bill and will remain in relative poverty? Would she welcome further legislation to remove the overall benefit cap in order to try to eliminate all poverty among children?
Helen Hayes
I will go on to talk a little about some of the further measures that I believe the Government need to take on this journey of tackling child poverty.
Evidence from the Joseph Rowntree Foundation is clear that, in the medium term, investment to bring down child poverty reduces the demand on public services that is caused by poor physical and mental health, and by poor education outcomes, which are caused by poverty. Removing the cap is projected to increase the health and education standards of 2 million children who would otherwise have been affected by the cap. By removing the two-child cap, this Labour Government are projected to deliver the biggest ever reduction in child poverty in a single Parliament. I am proud of the other measures that our Government have already announced to help families, which will also help to reduce child poverty: the expansion of free school meals to all children whose families are on universal credit, the delivery of universal free breakfast clubs and the reduction in school uniform costs. The Government’s commitment to children can be in no doubt.
The Education Committee is working jointly with the Work and Pensions Committee to undertake formal scrutiny of the Government’s child poverty strategy. We want the strategy to be as effective as possible, and over the coming weeks we will be listening to evidence from experts on the impacts that the measures announced will have and on whether more should be done. I want the Government to be truly ambitious in tackling child poverty. We should not simply lift the poorest children just above a threshold—important as that is—but ensure that children can truly thrive right across our country. That will require action on some of the other causes of poverty, including housing costs—a shocking number of children are living in temporary accommodation—and food and energy costs. We must provide access to support for families in communities, and an education and skills system that really works for everyone.
Those are the questions that our Committees will turn to in the coming weeks, but this step today is fundamental. The Bill sets the context for an ambitious strategy and will be transformative for families. I am proud to vote for it today.
Charlotte Cane (Ely and East Cambridgeshire) (LD)
Like so many Members from across the House, I welcome the Government’s decision finally to scrap the two-child limit on benefits—I just wish they had done so much earlier. The two-child limit is a cruel and unfair penalty on those in the most urgent need of welfare and support. The cap does not tackle the exploitation of the benefits system in order to avoid work and to continue having children; instead, it has been an enormous burden on thousands of household budgets and has pushed more children into poverty. Even if one believes, like the Conservatives, that people have children irresponsibly, I still cannot see how those children should be punished. Every child deserves a good start in life.
Dr Roz Savage (South Cotswolds) (LD)
There are many reasons people end up on universal credit and in family situations with more than two children. It is because of those blended families that Cotswold district council chose not to apply the two-child limit in its welfare support scheme. Does my hon. Friend agree that such councils—which have, in these cash-strapped times, supported blended families with more than two children —should not end up out of pocket and should be compensated by the Government for that support?
Charlotte Cane
I commend Cotswold district council for that work. Unfortunately, when I tried to get East Cambridgeshire district council to condemn the two-child cap, the Conservatives refused.
This policy was poorly conceived from the outset and has amounted to little more than attacks—not on parents, but on vulnerable children growing up in a cost of living crisis. My Ely and East Cambridgeshire constituency, which is relatively wealthy and has relatively high-paid work, is thankfully below the national average for child poverty. However, child poverty has continued to rise there despite the fact that 70% of affected households have at least one parent in work. Clearly, this is not a case of families scrounging off the system, but of family budgets stretched to breaking point.
Nationally, the picture looks similarly grim. Child poverty has increased over the past 15 years, pushing 850,000 more children into poverty. In rural areas such as my constituency, poverty can be all the more challenging: parents must travel miles to reach a supermarket or a food bank for affordable food, transport costs for school and work are far higher, fuel costs are higher and children are often socially isolated.
We should never have got to this point. The previous Conservative Government should have recognised that the two-child limit was both a failed experiment and salt in the wound for families dealing with spiralling costs in food, energy and basic necessities. I welcome the Government’s decision to make this correction, but it must be seen as the first step in improving the quality of life for children and building a better future. The Child Poverty Action Group estimates that child poverty may cost in excess of £39 billion a year, accounting for additional public spending in areas such as health and education, as well as future tax receipt losses from resulting unemployment.
Behind that economic loss are children, who will, having missed out on sports clubs and healthy food, face a higher risk of disabilities and long-term health conditions—and, as we heard earlier, they even face an increased chance of early death. They are not afforded the opportunities to develop and pursue their own interests. Many may miss out on higher education, apprenticeships and even early employment.
The Bill is about the future of all children living in this country. We must ensure they are equipped with the resources to thrive and the ability to contribute to a society that supports them from the very start. In that spirit, will the Minister agree to annual reviews of the entire universal credit system to ensure that it keeps pace with the cost of living and becomes an effective tool to tackle child poverty?
Lee Barron (Corby and East Northamptonshire) (Lab)
First, I want to take us back, because this debate is being pitched as if those who are not in work are getting something that is being paid for by those in work—that ain’t the case, and it is wrong to suggest it.
I will tell the House what the problem is: the scar of in-work poverty that was left on our economy. I came into politics to reduce child poverty. Children do not choose their circumstances. They are not to blame for low wages. They are not to blame for insecure work. They are not to blame for their parents’ pay packets, yet they are the ones who feel the consequences the most. A child’s chances should not depend on their parents’ wages. A child’s future should not depend on whether mum or dad has a bad boss or a bad year. That is why I was proud when the Government announced this policy, which will lift 450,000 children out of poverty by the end of this Parliament. That includes over 3,000 children in Corby and East Northamptonshire. That is not just a statistic. It is 3,000 children; it is 3,000 lives; it is 3,000 futures and 3,000 chances.
Members should not let anyone tell them that this is not about values, because it is. When we announced that we would put a tax on mansions, the Tories on the Opposition Benches were growling at us and telling us we could not do that, and now they are sitting there today telling us we should not be lifting 450,000 children out of poverty. This is all about values and where we stand. This issue tells us everything we need to know about the priorities of the Opposition parties: they will fight for their cheaper mansions but not for children who go to bed hungry.
And then there is Reform. Reform Members try to present themselves as the voice of working people, but when it comes to it, they vote against working families, they vote against employment rights, and they are voting against this Bill. Their amendment to the Bill says that they disagree with removing the two-child limit because it “fails to incentivise work” for low-paid families, but that is not people cheating the system or people taking advantage. That is working people kept in low pay by a system that the Conservatives built—a system that Reform now defends.
Work should be the route out of poverty, not into a lifetime trapped in it for children or their families. That is why this Government have chosen to back working families. That is why this Government have chosen to back children. That is why this Government are choosing fairness, and that is why Parliament should back this Bill.
Kit Malthouse (North West Hampshire) (Con)
As my hon. Friend the Member for Solihull West and Shirley (Dr Shastri-Hurst) said, no one in this House doubts the importance of supporting children. Labour Back Benchers are feeling good about the fact that they have organised themselves to deliver what they see as a simple moral good, but as they know and we know, things are much more complicated than that. I know they think they have delivered a simple moral good because not a single one of them has mentioned the rate. None of them has questioned why the additional rate is set at £17.25, rising to £17.90. They have not asked whether that is enough to address poverty. They have not sought to get under the skin of whether this is a more complicated and nuanced argument than it might at first appear. Just the simple act is enough, without contemplating the unintended consequences.
I am concerned that the Government are stumbling into a “Careful what you wish for” measure. First, a number of Opposition Members—and, indeed, the Secretary of State—mentioned the demographic time bomb that we face. There has been no discussion of this measure in the context of the overall fiscal problem that our children will face. At the moment, we have about 3.6 workers per pensioner in this country. By 2050, that will have fallen to two. How will we pay for all of this in the future? How will we fund it all without enormous debt? We have only to look across the channel at France to see what a fiscal eruption can look like, with civic disruption and unrest on the streets, when the necessary correction is made to a welfare state that is running out of control. I am afraid that that is exactly the situation we find ourselves in.
No one is pretending that decisions about welfare are easy—they are not easy. Having worked briefly as a Minister in the Department for Work and Pensions, I know that these are difficult decisions, yet no one is questioning the micro-decisions that are made. It is simply enough to say to people, “We’re pumping money out there. Let’s hope for the best.” Why is the standard rate for the mobility section of the personal independence payment set at £30.30? I do not know. Does anybody else know? Is there an argument for it? These are the decisions that Ministers have to make on a daily basis, not just about whether we pay welfare but how much we pay. One of my concerns about this measure is that none of that is part of a wider conversation about the massive demographic steam train that is coming down the tunnel towards us.
The second issue I have is that this legislation treats children as a burden to be somehow mitigated, necessarily because it includes them in the welfare bill, rather than as a bonus to be encouraged. As my hon. Friend the Member for Hinckley and Bosworth (Dr Evans) said, we on the Conservative Benches would much rather there were work incentives that came alongside children. When I was briefly the Secretary of State for Education, I was inundated with correspondence and approaches from lots of highly productive and ambitious women who wanted assistance in work. They wanted some kind of bonus, relief or package to encourage them to have children, rather than a safety net that rescued women if they had children. For a country that needs more children, we need a tilt in our mentality and approach to move from mitigation towards encouragement; that is my concern about embedding the notion that people should have more children in the welfare system.
The final issue I will raise is the legitimacy of the system, which has been raised by a number of Members. We often pretend that we do things for the first time in this country, whereas we can in fact look overseas for lessons, and we do not have to look very far. In France, where successive Governments increased family-related welfare with weak links towards work or contribution, it has created a wider resentment in society. Any successful welfare system must have an eye to legitimacy and consent from the wider population for it to exist.
Dr Arthur
We do not have to look to France. This is fundamentally an issue that many families face around balancing their budgets; many of them are having to get second jobs. Perhaps we can learn from the right hon. Gentleman’s experience, because he has been forced out to get a second job to make ends meet. Perhaps he can give some droplets of experience to those people who are struggling to make ends meet.
Kit Malthouse
I am glad that the hon. Gentleman is paying attention to my entries in the Register of Members’ Financial Interests, but, as he will know, I have not been forced out to get a job. I founded my business 30 years ago; I am one of the few people in this House who has created jobs by the sweat of my own hands, rather than just talking about it. Frankly, I pay the Sainsbury’s bill, the mortgages and all the rest of it for all my employees every single month, and I am proud to do so. Maybe he could learn some lessons, by spending time with some businesspeople, about what it is to make true fiscal and economic decisions.
Let me return to my third point, which is about legitimacy. One thing that was found in France was a rise in resentment, which resulted in President Macron taking specific steps to means-test the access to family welfare. French political scientists will point to the rise of the National Rally in France directly stemming from a mishandling of the welfare system and a growth in resentment in those who did not participate in it.
I am afraid that today we see that writ large in the Order Paper in the Reform party’s reasoned amendment, which was not selected. It calls for open discrimination in our welfare system against those who do not have parents born entirely in this country. I must declare an interest as I am afraid that includes two of my children, who were not born to a British citizen. It also includes the children of Members of Parliament who sit for the Reform party. There is something grotesque about seeking legislation that would downgrade the citizenship of one’s own children.
Jack Abbott (Ipswich) (Lab/Co-op)
It is true to say that the Conservative party has been right about one thing today: this is about choices, and I am incredibly proud to be making the one that we are making.
The Conservative party did untold damage to our country, whether it was in hollowing out the criminal justice system, crumbling school buildings and hospitals, record NHS waiting lists or Liz Truss, but the most egregious part of its record was the harm it inflicted on our nation’s children. An entire generation was plunged into poverty.
Poverty is not inevitable. The last Labour Government lifted 600,000 children out of poverty, but the Conservatives’ scorched-earth programme of austerity reversed that trend. Over their 14 years in power, the number of those in child poverty rose by 900,000, and 4.5 million children now live in poverty. In my constituency, thousands of children are growing up in poverty, which is around one in three. Those are not simply abstract statistics; they are the children and families I meet every week.
The shadow Secretary of State, the hon. Member for Faversham and Mid Kent (Helen Whately), said that families have difficult conversations around the kitchen table, and she is absolutely right. Parents are worried about whether they will be turning the heating on or skipping a meal; kids already feel the weight of the world on their shoulders before their 10th birthday; and—as was mentioned just a moment ago—parents working two jobs are still unable to make ends meet. It is cold bedrooms, missed meals and two small, patched-together school uniforms—these are scars that last a lifetime.
Much of that hardship and suffering can be directly attributed to the two-child benefit limit. It is a failed, cruel policy experiment and—leaving aside the fact-free nonsense that we have heard previously from the Conservative party—it makes no difference to family sizes, and it does not drive up employment. Indeed, as has already been mentioned, almost 60% of affected families are in work. The two-child limit does not achieve the so-called goals that Tory ideologues pretend to lay out. Instead, it punishes children; all it does is make children poorer, and it is the single biggest driver of child poverty. Perhaps that is why there are so few Opposition Members prepared to sit and defend this morally, socially and economically bankrupt policy.
Dr Evans
There are not many on the Opposition Benches—the hon. Gentleman’s party won the last election—but we know that the public support keeping this cap in place. Any poll conducted in the last few years has suggested that, on average, 60% of people think that the cap should remain. Why does the hon. Gentleman think the British public back the cap staying in place?
Jack Abbott
I was actually referring to the number of Opposition Members defending this policy here today. I do not think there is a single person in the country who will defend keeping hundreds of thousands more children in poverty. That is what we are getting rid of today, and that is what the hon. Gentleman’s party is defending. It is difficult to think of another policy in modern Britain that is so stark in its design and so devastating in its impact. This policy, for nearly a decade, has quietly and cruelly shaped and limited the life chances of children across this country. Poverty impacts children before they are even born, and its effects continue to be felt in myriad ways at every stage of life after that.
Children growing up in poverty are more likely to experience mental and physical health issues and to do worse in school. They are more likely to be unemployed, earn less or be in low-skilled work than their peers, and they are more likely to experience homelessness and poor health. The shadow Secretary of State said that it is a trap for worklessness. No, this policy is a trap for worklessness, which is exactly what it has achieved over the previous few years. The consequences of poverty are severe and long-lasting, with children born into poverty ultimately having lower life expectancies. Life is shorter because of poverty, and poverty exists in its extreme because of this policy.
For children growing up in a low-income household in my county of Suffolk, education disadvantage starts before they even begin school, and it compounds at every stage of their education. The latest figures from the Education Policy Institute’s 2025 disadvantage report shows that, before kids even enter primary school, they are almost half a year behind their peers. By the time they finish key stage 3, as they choose their options, they are a staggering 21.7 months behind—that is nearly two full school years before they even begin studying for their GCSEs. The translation of this deprivation gap over every stage of a child’s education to their examination results is tangible and stark: disadvantaged students in Suffolk are 4.4 grades behind at the age of 16.
I remember being a councillor during the pandemic, and I saw the enormous impact that this had on so many families, as many Members will remember. Never mind huddling around a kitchen or dining room table trying to work, many families did not have a kitchen or dining room table. Indeed, many disadvantaged students in places like Ipswich were left without electronic devices, such as laptops, for many months. I had hoped that that would be a watershed moment in how we view the link between education and poverty. Instead, what I saw in opposition, as a county councillor in Suffolk, was more cuts to children’s centres and more than a halving of health visitors, yet we wonder why we have such problems now when young children enter education for the first time. It is an absolute disgrace that even now—even after the impact we have seen and all the evidence we have seen—the Conservatives cannot bring themselves to support measures that reduce child poverty.
I am proud to support this Bill, because scrapping the two-child limit will have one of the greatest impacts on driving down child poverty. That one action will lift 450,000 children across our country out of poverty, including more than 3,000 in my town of Ipswich. Through this action, alongside an enormous package of other actions that our Government are taking, we will take over half a million children out of poverty—the largest reduction in a single Parliament since records began.
The two-child limit is quite simply wrong. The number of brothers and sisters that a child has should never determine whether they go hungry or how well they do in school, and no child should be punished simply for existing. Tackling child poverty is in our Labour party’s DNA, and today I could not be prouder to be a Labour MP, because today this Labour Government are following in the footsteps of every Labour Government who came before them by lifting children out of poverty and transforming children’s lives.
Sarah Pochin (Runcorn and Helsby) (Reform)
Although the reasoned amendment tabled by my Reform UK colleagues and myself has not been selected, I would still like to speak to the contents of that important amendment.
Scrapping the two-child benefit limit does nothing to help hard-working parents who set their alarm clocks every morning, and does everything to encourage families who are already on benefits to have more children in the full knowledge that the state will pay for them. Removing the two-child benefit cap without imposing any other restrictions, such as limiting it to working families with British-born parents, fails to incentivise work.
Several hon. Members rose—
Sarah Pochin
Let me make some progress. It increases the support to non-working families beyond that given to working parents earning above the benefit level, so those who work are being punished while those who play the system are rewarded. The cost to the taxpayer of scrapping the cap is estimated at £15 billion over the next five years, with families affected by the cap estimated to gain an average of £25,000 per family over that period, and the more children they have, the more they get. That is not sustainable, and it is not fair—it is another step towards crippling our economy instead of introducing policies to grow it. We cannot advocate for a society in which work does not pay.
Furthermore, due to higher birth rates among foreign nationals—
Several hon. Members rose—
Sarah Pochin
Just a minute—I do not know who is first.
Due to higher birth rates among foreign nationals, a significant amount of this additional expenditure is expected to go to households in which at least one parent was born outside the UK.
To be clear, and to conclude, Reform will only lift the cap for British families where both parents are in full-time work.
Mr Richard Quigley (Isle of Wight West) (Lab)
Listening to the shadow Secretary of State, the hon. Member for Faversham and Mid Kent (Helen Whately), is quite something—one would think that the recipients of this benefit were spending the money on soft furnishings for their second homes. They are not; they are spending it on food, rent and clothing for their children. The rise in child poverty under the previous Tory Government has been a shameful stain on this country, and I am proud to be part of a Government who are taking action, not only to provide food and basic necessities but to give children the opportunity to escape cycles of poverty and build secure, independent futures. In the months since this policy was announced, we have heard some truly shameful language from Opposition Members, including describing this Budget as a “Budget for ‘Benefits Street’”. In doing so, they completely denigrate the 450,000 children who never chose to be born into poverty, and who for the most part have simply had the misfortune of growing up during years of successive Conservative Governments.
It is telling that using taxpayers’ money to lift children out of poverty is framed by the Conservatives as an irresponsible use of public funds, while the £10 billion lost to covid fraud is something we are apparently expected to forget and move on from without consequence. I would genuinely welcome the shadow Secretary of State and the Leader of the Opposition to my constituency, so that they can explain directly to the nearly 1,600 children who will be lifted out of poverty by the removal of the two-child cap why the Leader of the Opposition so routinely denigrates people like them and their parents—parents who themselves are paying the price for a Government she was part of, who sent mortgages soaring and allowed inflation to reach 11%. Sadly, I will not hold my breath. When she is not using the Isle of Wight as a punchline for one of her poor, laugh-less jokes, she treats it as a photo opportunity, without having the basic respect to engage with local people, local media or, indeed, the local MP.
Perhaps we should not be surprised. The Conservative party has consistently failed to understand the real, tangible difference that such policies make to people’s lives. Instead of reckoning with the impact of their poverty-accelerating decisions, they choose to vilify those who stand to benefit from the Bill. As I understand it, Reform would now reverse the two-child cap to find money to pay for a cheaper pint at the local pub. Presumably Reform’s next policies would increase the drunk-driving limit to whatever people think they can get away with and lower the age of buying cigarettes to 12, because daddy will be too busy down the pub saving money to buy his own cigs.
As a small business owner, I know too well the damaging legacy of austerity, and the removal of the two-child cap represents the clearing away of one of the most shameful legacies of the austerity years. I know from first-hand experience the impact that Government decisions have on local economies. Austerity was not just a line in a Budget; it was a decade of under-investment that hit businesses such as mine hard. It hollowed out our high streets, weakened consumer confidence and squeezed the incomes of working families.
This policy is about more than tackling poverty and the intergenerational damage it causes; it is about giving hard-working families the chance to feel that they are a part of their high street again, and supporting those who have lost a wage earner or whose wages have simply failed to keep pace with the cost of living. It is called social security for a reason, and it is the solemn responsibility of any Government to provide a safety net to those who, through no fault of their own, have fallen on hard times.
This policy is not just about the removal of the benefits cap; it is an investment in our greatest asset—the British people—and in our future. It is about ensuring that the next generation do not go to school hungry or without the basic necessities and about putting our country on a stronger footing by giving every child a fair start in life.
Sir Ashley Fox (Bridgwater) (Con)
The benefits system is a safety net designed to support people in hardship, but a fair system must balance that with the needs of those who pay for it. Benefits are paid by the taxpayers of today or, if the money is borrowed, as is so often the case with this Government, by the taxpayers of tomorrow. Every time the cost of benefits rises, so does the burden on the taxpayer, and that cost is growing unsustainably. Spending on health and disability benefits alone is set to hit £100 billion a year by the end of the decade. It is a mark of Labour’s irresponsibility that it presents a Bill today to increase welfare spending further.
I believe in personal responsibility. Not only should our country live within its means, but every individual and family should do so too. Many thousands of couples every year think about whether to have children. They make that choice based on a number of factors, but one of the most important is whether they can afford to bring up that child as they would like to. Those in receipt of benefits should face the same choices as those in work. That is why the Conservatives introduced the two-child benefit cap, and it is why I believe it should be retained.
Under the pre-2017 system, there was a fundamental element of unfairness. A family in receipt of benefits saw them increase automatically every time they had another child. That was not true of a family not in receipt of benefits. Why should a taxpayer who has decided that they cannot afford more children subsidise the third, fourth or fifth child of someone not in work?
I understand why Labour Members are in favour of more welfare spending. They stopped representing working people a long time ago, and they now want to create a society where more than half the population is dependent on the state to ensure their re-election. Why has the leader of Reform UK, the hon. Member for Clacton (Nigel Farage), supported scrapping the two-child cap until so very recently? Voters in my constituency, some even sympathetic to his cause, have been horrified. I think the answer is that he is chasing votes in the north of England, hoping to win support from former Labour voters. That instinct for higher spending shows that Reform UK is wholly unserious about governing our country. Britain needs a Government determined to deliver the changes we need: controlling public expenditure and reducing borrowing, leading to lower taxes and a stronger economy.
Sam Rushworth
I am deeply offended by the hon. Gentleman’s comment about people in the north of England, as though they are people who simply vote for their own welfare. That is not true. The people I represent are proud to be hard-working people in good working-class jobs, and many of them have children who have been impacted by the two-child cap. Would the hon. Gentleman like to apologise to them?
Sir Ashley Fox
If the hon. Gentleman had listened to what I was saying, he would know that I was describing the tactics of the hon. Member for Clacton. That, I believe, is what motivates his policy on this matter.
The Government seem to be completely powerless to do anything to reverse the spiralling costs of the welfare state. The Prime Minister did, of course, try to produce a package of modest reforms last year. He set out to save £4.5 billion, but was forced into a humiliating U-turn and ended up spending more taxpayers’ money to buy off Labour rebels. He now says that his welfare reforms strike the “right balance”. Does anyone believe him? There is not a thought for the taxpayer, and not a thought about the extra debt that the Government are incurring and the interest that will have to be paid on it.
Let me remind Labour Members that before the election, they said repeatedly that they would
“not increase taxes on working people”.
That was accompanied by a manifesto pledge that they would increase spending by £9.5 billion, but in the 18 months since they were elected, the Government have actually increased spending by £100 billion—10 times more than they promised. They have increased taxes by £66 billion, and borrowing by an extra £40 billion. This is what the Labour Government do best: spending other people’s money. It is in their DNA. They do not care about getting better value for the taxpayer; their only thought is about how to spend and borrow more, as if that were a sign of caring.
I am proud to have a leader with the backbone to tell the truth to the British people. We need to reduce the size of the state so that it does less but does it better. We will reward people who do the right thing—who work hard, who save, who invest, who create jobs, and who build a more prosperous country for all of us.
Samantha Niblett (South Derbyshire) (Lab)
I rise to speak in support of lifting the two-child cap, not just as a Member of Parliament but as someone who knows personally what it means to live on the edge of financial insecurity. That was not my child’s fault.
A few years ago, between the end of 2018 and the beginning of 2019, long before I entered the House, I was for a time a single parent and out of work—not for long in the grand scheme of things, but for long enough to struggle again. I do not want to make this speech about me, but I want to give this example because, hopefully, it shows a modicum of insight and empathy that appears to be missing in more than one party on the other side of the House.
Like millions of people, I was doing everything that I could to keep going, to keep my home afloat and to shield my child from the worst of the stress and anxiety that come with not having enough. Many people experience that even in work—people with responsibility for more children than I have. At that time, I had to register a statutory off-road notification for my car because I simply could not afford to run and tax it, so twice a day, every day, I would walk to the school. That took me about three hours. Let me be clear about what that meant in practice. It meant—especially for my daughter—starting the day already exhausted, yet knowing that I still had to parent, to job hunt, to cope. At the end of the day, it meant digging deep for energy that, quite frankly, I often just did not have. On some days, if I could scrape together enough loose change—coins that I gathered from looking hither and thither—I could afford to take a bus, and that small thing, that single bus journey, made an enormous difference to me and to my child. I had a little more patience, a little more capacity to be the parent that my child needed me to be.
That, for so many, is the reality that we are talking about today. The two-child cap is often discussed in abstract terms—in terms of numbers, incentives and thresholds—but behind every statistic is a family making impossible choices, parents skipping meals so that their children can eat, and children growing up with limits imposed on them before they have even had a chance to begin. This is not about supporting families who are simply irresponsible or reckless or thoughtless or not planning ahead for children they can or cannot afford. It predominantly impacts on working families who sometimes fall on hard times, families who lose a job, families whose circumstances change through illness, bereavement or redundancy, families who did not plan to need support but need it none the less. Children do not choose the circumstances they are born into, yet under the two-child cap we are telling some children that they are worth less than others. This support will remove the arbitrary line drawn not by need, but by ideology.
Lifting the two-child cap is not about rewarding anyone, but about recognising reality. It is about acknowledging that the cost of living has risen, that wages have not kept pace and that social security should provide security, especially for children. When we invest in families, we invest in better outcomes, better health, less crime, better education and stronger communities. We also reduce pressure on public services further down the line, and we give parents the breathing space they need.
When I think back to the long walks, exhaustion and worry, as well as the quiet determination to keep going, I know how much difference a little extra support will make for the very many families and children who will be lifted out of poverty by this policy. It is not luxury and comfort; it is just dignity and a fair chance. It is the difference between a parent breaking or not, going without a meal to feed their child or not, and the difference between a child not starting the day exhausted and having a warm bedroom at bedtime or not.
Saying, “Don’t have children if you can’t afford them,” just does not wash. It is not a parent’s fault if they have record high energy bills thanks to the war in Ukraine. Saying that does not help a parent who is out of work due to ill health, thanks to a broken NHS that has not been there to help them after 14 years of Conservative government. It is no parent’s fault when they have a child with special educational needs and disabilities, who perhaps they have had to give up work to support. The fault does not lie with the more than 60% of working families who are struggling. That is why I urge this House to do the right thing, as have Citizens Advice, the Child Poverty Action Group, Alder Hey children’s hospital, the Mental Health Foundation, the Royal College of Nursing, the Women’s Budget Group and UNICEF UK—to name but a few. I notice that Conservative Members have referred to absolutely no organisations that back their claim that this is the wrong thing to do.
I want to ensure that no child in this country is held back simply because of the circumstances they were born into or the changed circumstances that have made things harder for them and their parents. That is why I am grateful that we are not passing the Bill in isolation, but that this Labour Government are delivering Best Start hubs, breakfast clubs to help parents get back into work and to get to work earlier, and up to £7,000 of childcare for working parents. We are also helping young people who are out of work, education or training into the workplace to better their life opportunities, and that is what lifting the two-child cap is about.
Manuela Perteghella (Stratford-on-Avon) (LD)
The two-child limit has punished children for circumstances entirely beyond their control. For nearly a decade, families have been denied support simply because a child happened to be born as a third or a fourth child. That was a cruel choice made by policymakers, not one made in children’s best interests, and it really shows that a Government can get it wrong. This was a particularly callous policy because it was designed to punish children, and because of the harm done to generations of young people, who are the future of our country.
Today, 4.5 million children in the UK are growing up in poverty, including in my constituency of Stratford-on-Avon. This policy has been a major driver of deep poverty, pushing working families further into hardship at a time when food, energy and housing costs remain painfully high. In Stratford-on-Avon, I hear from parents who are working hard, often juggling insecure hours or caring responsibilities, yet are still struggling to afford basics such as heating, healthy food, transport and even furniture. Many live in privately rented homes where costs keep rising, while support has been cut or frozen. These families are doing everything that is asked of them, yet the system has been stacked against them.
I gently remind the shadow Secretary of State, the hon. Member for Faversham and Mid Kent (Helen Whately), that looking after five children as a single parent is a job—it is work. Raising a family is one of the most important jobs or contributions that a person can make to society. Research by the Social Market Foundation has made the wider point that when countries make it harder to have and raise children, birth rates tend to fall and populations age faster. That has real consequences for the long-term health of our economy and the public finances, because a smaller working-age population has to support a larger retired population, while demand, productivity and innovation can all suffer.
The same analysis also underlines something we should be honest about in this debate: in the UK, being a parent is too often tied to financial pressure. Where families feel supported through affordable, high-quality childcare and a safety net that does not penalise children, outcomes are better for parents and for children alike, and the whole society benefits. If we are serious about giving every child the best start in life, we should stop designing policy that makes it harder for families to get by.
Removing the two-child limit is the single most effective step this House can take to lift children out of poverty during this Parliament. It is backed by children’s charities, economists, educators and those working on the frontline. It will improve health, educational outcomes and life chances, while easing pressure on public services in the long term. A fair society does not balance its books by denying children support. It invests in them, protects them and gives every child the opportunity to thrive. That is why I and my Liberal Democrat colleagues support the removal of the shameful two-child limit and why I am proud to back the Bill’s Second Reading.
Mr James Frith (Bury North) (Lab)
Of course I support the Bill. It is what we are here for: to do this at the stroke of a pen—not of any pen, but that of a Government pen—after years in opposition, hoping to be able to come in and enact the sort of change we are able to make today. I am proud to stand in support of this Bill, and of the work that the Minister for Social Security and Disability continues to do in assessing the welfare reforms to come.
In my constituency, child poverty is a daily reality for too many families. More than 7,000 children in Bury North are growing up in poverty. That means that over a third of the families I represent are in poverty—well above the national average—and the majority of them are in work. Behind each number is a child arriving at school hungry, a parent worrying about rent or heating, and families doing everything right but still falling short on the bills they have to pay. What makes this harder is that Bury North is often seen, on paper, as doing reasonably well, with strong communities and pride in place, but proximity to prosperity does not cushion poverty; it simply hides it.
Too often, policy has failed to understand that. That is why the Government are right to reassess how funding is allocated, recognising that affluence and deprivation sit side by side, ward by ward. Crucially, it is why this change is being made now, when it is costed and affordable, yet overdue. In Chesham Fold and parts of East Ward, parents work every hour they can, budgeting meticulously, yet still struggle to cover the basics. The least well-off are often the best at budgeting, because they have no choice but to stretch limited means as far as possible.
Nowhere is inequality clearer than in health. A child born in one part of my constituency can expect to live seven to 10 years less than a child born barely a mile away. That gap is not about lifestyle choices. It is about poverty shaping lives before they have even properly begun. That is why lifting the two-child limit matters so much, and why I support it as an economic and moral intervention. Scrapping it will lift hundreds of thousands of children out of poverty, reduce the depth of poverty for many more and increase spending power in exactly the communities that need it most. That money is spent locally, in full, on food shops, markets, uniforms, rent, heating and transport. It circulates through local economies, gives them buoyancy, stabilises households and reduces pressure on public services downstream. Child poverty already costs our economy close to £40 billion a year in lost potential and higher demand. Ending it for families in Bury North is not ideological; it is hard-headed prevention.
I challenge those who continue to trade in the myths that cling to this debate. Most affected families are already in work; many include a disabled child. Family circumstances change overnight for many of us, through bereavement, redundancy or relationship breakdown. A social security system that fails to recognise that is not tough; it is brittle and will break too easily, as it did for 14 years. This matters even more profoundly for children with special educational needs and disabilities, with the recent Sutton Trust report stating that growing up with SEND and in poverty creates a “double disadvantage”.
I support this Government’s instincts on welfare reform. Rights, responsibilities and contribution matter, but responsibility works only if the floor people are expected to stand on is high enough in the first place. The Bill, alongside wider measures to support families and tackle low incomes, sends a clear message: we are serious about prevention, serious about fairness, and serious about breaking the link between the circumstances of birth and chances in life.
Zarah Sultana (Coventry South) (Your Party)
Labour MPs are lining up today to congratulate themselves on ending the two-child limit. I welcome that decision; I fought for it and I voted for it, and I was suspended and punished by my former party for doing so. While that punishment was being handed out by the Labour Whips Office on behalf of the Prime Minister, children in Coventry South and across the country paid the price.
Facts matter: the two-child limit pushes an estimated 109 children into poverty every single day. From the moment I was suspended for voting to scrap the limit to today, when we are debating the Second Reading of this Bill, 19 months have passed—19 months of delay and excuses. During that time, while this Labour Government delayed, argued and disciplined their own MPs for doing the right thing, over 63,000 children were pushed into poverty. Those children will not get that time back. They will carry the consequences for the rest of their lives.
There are now 4.5 million children living in poverty in Britain. That is not a statistic; in the sixth largest economy in the world, that is a national disgrace. Without further action, that number will rise to 4.7 million during this Parliament. Scrapping the two-child limit matters because the limit is the single biggest driver of rising child poverty.
Jeremy Corbyn
Does the hon. Member recognise that additional causes of child poverty include a tax threshold that has not been raised at all and the insufficiency of the minimum wage, which drives many working families into desperate poverty, with their children suffering as a result?
Zarah Sultana
I agree completely with the right hon. Gentleman. [Interruption.] If I could continue without the heckling from those on the Labour Benches who have now decided that child poverty is a priority they want to pursue—as I was saying, scrapping the two-child limit matters because the limit is the single biggest driver of rising child poverty. Scrapping it will lift hundreds of thousands of children closer to dignity and security.
But this Labour Government have decided to stop halfway, because although the two-child limit goes, the benefit cap remains. That means that tens of thousands of families will feel no benefit at all from this change. According to the Government’s own analysis, 50,000 families will gain nothing, another 10,000 will gain only part of what they are owed, and some parents will be left with just £3 a week after rent—£3 to feed, clothe and raise a child. Let us be clear: the Government cannot claim to have ended a policy that punishes children while keeping another that traps them in deep poverty. The benefit cap does not drive employment or create opportunity; it simply takes money from the poorest families—many of them single parents with very young children—and pushes them deeper into despair and hardship.
If this Labour Government are serious about tackling child poverty, they have to finish the job. That means scrapping the benefit cap, ending the two-child limit in full, increasing child-related benefits and making free school meals universal so that no child is excluded simply because their parents earn a pound too much. It means introducing an essentials guarantee into our social security system so that everyone can afford the basics, and ending the four-year freeze on local housing allowance so that families can keep a roof over their heads in the middle of a cost of living crisis. Every single day of delay causes real harm to the most vulnerable in our society; every day of half measures by this Labour Government means that children will continue growing up cold, hungry and anxious about what comes tomorrow.
Reducing child poverty is not radical; it is responsible, it is the right thing to do, it improves health, it improves education and it improves long-term economic outcomes. Last July, alongside six other colleagues, I voted to scrap the two-child benefit cap not for applause; I voted for it because poverty is a political choice, and it was the right thing to do. If this House truly believes that all children are equal, it must act on that belief and abolish the two-child benefit cap in full, without delay.
Ian Byrne (Liverpool West Derby) (Lab)
I was also one of the seven Labour MPs suspended: for voting, to be quite clear, on an amendment to strengthen the King’s Speech by removing the two-child limit. I had made a vow to my constituents in Liverpool West Derby during the election that I would vote to scrap that inhumane policy at every single opportunity I had—so I did.
Today I am grateful and, frankly, relieved that the Government have recognised this policy for what it always was: an immoral attack from the architect of austerity, George Osborne, which punished working-class children. That is everything we should oppose in a Labour Government. Today is a big step in the right direction for the Government elected on a promise to support the most vulnerable, and for change. I am delighted that we stand here today.
Shamefully, 4.5 million children are living in poverty in the UK—850,000 more than in 2010. The two-child limit has been a key driver of that increase since its introduction in 2017. According to the Child Poverty Action Group, every single day that the policy existed, 109 children were pushed into poverty and denied their ability to live life to the full. Trussell figures are just as stark: almost one in three emergency food parcels last year went to families with three or more children, who make up just 11% of the population, and more than two in five of those families experienced food insecurity. This winter, food banks have been forced to provide an emergency food parcel every 10 seconds—in one of the richest, wealthiest nations on Earth.
Jeremy Corbyn
I compliment the hon. Member on the amazing work he has done on the Right to Food Commission and on food banks in Liverpool, supported by all the football clubs there. He must be aware—maybe he has figures—of the number of families with children who use food banks who are in work, and sometimes doing two jobs, but who are still so poor that they cannot afford to pay a weekly grocery bill.
Ian Byrne
I thank my right hon. Friend for those remarks. We run food pantries in Liverpool with Fans Supporting Foodbanks, and over 60% of those who access those pantries are in work. That is the stark reality of the world we live in.
Behind the figures are real families and real children. Alder Hey Children’s Charity made abolishing the two-child limit its primary focus in its Put Children First campaign report. That charity see at first hand the damage the policy causes to the children in our communities. I have spoken to my great friend, the paediatrician Dr Ian Sinha from Alder Hey children’s hospital. He was presented with a child who, at first sight, he thought had leukaemia. It turned out to be malnutrition.
Poverty kills. That is why scrapping the two-child limit matters. In my constituency of Liverpool West Derby alone, over 3,000 children will be lifted out of poverty. Nationally, 470,000 children will benefit by 2027, alongside 200,000 adults. That represents a 15% reduction in child poverty, with the living standards of 1.6 million children improving immediately.
The impact goes far beyond immediate relief. As we heard at the Right to Food Commission’s evidence session last week in Knowsley, lifting families out of poverty and improving their food security transforms lives, leading to better health outcomes, less pressure on the NHS, higher educational attainment and a stronger future workforce. For those in this place today and many who are not here now who rallied against the cost of lifting children out of poverty, the economic benefit of removing the two-child limit is estimated at £3.1 billion per year through reduced pressure on public services, increased employment and higher tax revenues. It is cost-neutral. For those who speak only the language of the Treasury, it is not only morally right but fiscally responsible. If that floats your boat, that is what we are talking about.
We must be honest, though: this measure does not go far enough. We are voting to remove the two-child benefit limit, not the benefit cap. The cap remains, meaning that 50,000 families will see no benefit at all and 20,000 will see only a marginal increase. If we are really serious about ending child poverty—and I hope we are, with the strategy that we are bringing forward—this Government must commit to removing the benefit cap entirely in this Parliament. The Right to Food UK Commission will also call for legislation on a comprehensive right to food, including universal free school meals, transparency on food costs and the requirement for food security to be considered across all areas of policy.
I urge colleagues to support the Bill, but I remind the House that when it comes to inequality, we do not get to choose where our moral mission ends. As long as children in 21st-century Britain are growing up hungry or in poverty, there is more we can and must do. Let us remove the two-child limit today, end the benefit cap, legislate for the right to food and build a Britain where no family or child is left behind.
Liz Jarvis (Eastleigh) (LD)
Scrapping the two-child benefit cap is the single most important action this Government could take to improve outcomes for children in poverty. My Liberal Democrat colleagues and I have called for it consistently, so I am pleased that the Government are finally taking this step. Children and young people in Eastleigh and across our country have paid the price for a policy that was never about fairness, but instead about cutting support to the families who are often struggling the most. This cruel, shameful policy should never have been introduced in the first place. I reiterate that circumstances can change in a heartbeat: redundancy, bereavement or discovering that a child needs special care, meaning that a parent has to give up work—these life-changing events can all have a huge and sometimes devastating impact on household income.
According to the End Child Poverty coalition, 20.6% of children in Eastleigh are growing up in poverty. These experiences in early childhood shape outcomes for life, affecting health, educational attainment and future earnings. Without further action, over 4 million children in the UK will still be growing up in poverty by 2029. Housing costs, inflation—particularly food inflation—and high energy costs continue to be central drivers of hardship.
The Department for Work and Pensions’ own impact assessment has found that around 50,000 low-income families currently affected by the two-child benefit limit will gain nothing when it is lifted in April. A further 20,000 will see their incomes lift only partially from April, due to having their income raised to benefit cap level. What further measures will the Minister take to ensure that all children can fulfil their full potential? Citizens Advice Eastleigh recently advised a single parent whose universal credit was reduced by nearly 30% due to the benefit cap, which, combined with her high rental costs, left her with only £400 a month to feed and clothe her children and keep them warm. Charities in my constituency and across the UK say the same thing: the Bill on its own, while welcome, is not enough.
A fair society does not balance its books on the backs of children. It is frankly astonishing that the Conservatives would reinstate the two-child benefit cap. According to the Institute for Fiscal Studies, the Conservatives’ policy did not have a significant impact on labour supply and has not considerably affected fertility decisions, so the only thing it did was to drive more children into poverty. What a terrible legacy that is. I wonder what they would say to the 72% of children living in poverty who are in working families, and the families with three or more children who are in poverty through absolutely no fault of their own. A fair society protects its children, invests in them and gives every child the chance to thrive. That is why I support this Bill, and why I will continue to press for further action until child poverty in this country is eradicated once and for all.
Darren Paffey (Southampton Itchen) (Lab)
I am proud to support the Bill and do so with the families of Southampton firmly in mind. Those are families who fell foul of the last Conservative Government’s mission to make Britain Dickensian again.
Child deprivation in my city is among the worst in the country—worse than more than 83% of local authorities. Here, that is a potentially abstract statistic; there, it is reflected in the lived reality of my constituents. More than one in five working-age adults in Southampton are on universal credit. That rises to an average of one in three in our most deprived neighbourhoods. As colleagues have said, many of those people are working hard but are still falling short. What was the last Conservative Government’s answer to that? It was to count the children and punish the whole family. No doubt tonight Conservative Members will traipse through the Lobby and vote to keep a lid on the 450,000 children who are about to be released from poverty.
The two-child limit simply did not work. If anything, it compounded the pressures on families—families who repeatedly tell me that the universal credit they receive barely covers the rent, let alone food, heating or school essentials. That is the Tory legacy, and that is the deeply entrenched poverty that this Labour Government are having to undo bit by bit. It is therefore no surprise that an estimated 10,000 children in Southampton still live in households with absolute low income and that 25% of children live in households with relative low income. These realities demand clear action, and this Bill is part of that action being led by the Labour Government.
Matt Rodda (Reading Central) (Lab)
My hon. Friend is making an excellent point. The issues he describes in his Southampton constituency apply in a similar way to my residents in Reading. Does he agree that an important aspect of the Government’s work is not only what we are debating today, but the wider and broader package of measures, such as help on housing and the cost of transport and the warm homes initiative? Perhaps he will talk about the overall impact of these measures.
Darren Paffey
I thank my hon. Friend for making that salient point, and I will come to that wider package of measures.
Of course, we have heard straw-man arguments, saying, “Well, this one thing will not solve child poverty.” No one is claiming that it will solve child poverty; it is one piece in the jigsaw of the wider work that this Government are doing. But I am glad that this punitive, arbitrary cap, which only made life worse for so many, is being scrapped. That will lift up to 2,500 children in Southampton Itchen out of poverty.
If I were to credit the Conservative Opposition with one thing in this debate, it would be their consistency.
Darren Paffey
Consistently wrong, and they have made a consistent and desperate attempt to be divisive. They are trying to split the country into those who pay tax and those who receive welfare. These generalisations around the “deserving” and the “undeserving” poor are not only crass but factually wrong. Many contribute through work for years. They fall on hard times and rely on the safety net that they have paid into—my hon. Friend the Member for South Derbyshire (Samantha Niblett) made that point eloquently. The Conservatives ignore the fact that many receive universal credit while they are working. That is the state topping up poverty wages. The Conservatives might be happy to ignore that, but Labour is taking action on the minimum wage—what a contrast.
This Bill removing the two-child limit is a vital step, but—to the point made by my hon. Friend the Member for Reading Central (Matt Rodda)—it is not a stand-alone measure. It sits alongside this Labour Government’s wider work, such as opening free breakfast clubs, which will transform life chances, with early adopters in St John’s, St Patrick’s and Hightown primary schools in my constituency. It also sits alongside the £20 million Pride in Place investment in the Weston estate and the expansion of free school meals. A third of pupils in my state-funded schools are eligible for free school meals, and more are set to get that support, making a material difference to their lives and breaking down some of the barriers to learning that still exist.
Labour is investing in more childcare to help those parents who face barriers to getting into work. We are strengthening some of the universal credit work allowances, and delivering a comprehensive child poverty strategy aimed at giving every single child a fair start. I commend the Secretaries of State for Education and for Work and Pensions for the work they have done on leading that vital change.
We all dream of a future where these kinds of benefits might not be as necessary as they are now. We dream of, and Labour is working towards, a world where work pays well and pays better, which our Employment Rights Act 2025 moves us closer to achieving. We dream of a world where the cost of living crisis is less acute, as our action on warm homes and freezing rail fares, VAT rates, income tax rates and fuel duty will help to achieve. Add to that the creation of opportunities through the youth guarantee scheme and more apprenticeships, and we can see that a lot is happening, but that there is still much more to do.
The Bill recognises a very simple truth: children do not choose the circumstances into which they are born. Supporting the Bill and scrapping the arbitrary failed cap is not only the right economic decision; it is the right moral decision.
Siân Berry (Brighton Pavilion) (Green)
The Government have drawn this Bill too narrowly. It will, as Members have mentioned several times, leave at least 150,000 children in larger families with no extra help at all. For example, Maryam, highlighted by the Z2K charity, is a lone parent of three. She fled from domestic abuse and relies on us for her income while she restarts her life. Abolishing the two-child limit alone will not improve her life one bit, because she is affected by both the two-child limit and the overall benefit cap.
In December, after this policy change was finally announced—about 18 months after the Government should have taken action—I asked Ministers how many families and children would be excluded from the extra help, and they told me that that information was not available. It is beyond me how they could decide that this policy would leave out children without knowing exactly how many. DWP data shows that there are nearly 1,000 families subject to the benefit cap in my constituency, but I was not told—and I still do not know—how many of my families will be excluded from the provisions in the Bill. We do know how many children in total will be left out and not helped. The impact assessment for the Bill says that 50,000 families will see no gain at all, and that another 20,000 families in the first year will only partially gain before the household benefit cap kicks in for them too. In total, at least 200,000 children will not get the help they need from the Government.
The benefit cap, like the two-child limit, was always unjust. Introduced by the Conservatives who used headlines and misrepresentations, they drove up stigma and demonisation—demonisation of children in poverty and their parents. The Conservatives failed to see that social security is security for everyone, and that this spending pays back in wider benefits that the Treasury and the country will see. We should not limit lives through prejudice,
Kirsty Blackman
Does the hon. Member share my concerns that the arguments that are being made by the Labour Government in cancelling the two-child cap were applicable 19 months ago, and that 61,000 children could have been kept out of poverty if the Government had agreed with us in debates on the King’s Speech, rather than waiting until now?
Siân Berry
I thank the hon. Member for pointing out yet again that some of us in this House voted to move on this issue many, many months ago, and it is about time that the Government caught up.
I utterly reject the racist agenda of Reform’s objections. The fact is that the Bill is not wrong, but it fails to do right by far too many children, so what will the Government do to fix that? The scope of the Bill could be widened by the Government to remove the benefit cap. This could be done through a motion or even by a simple amendment, which I have been trying to achieve. It is down to the Government to listen to Members who have spoken on this issue today. I quite simply ask them whether they will now act.
Nadia Whittome (Nottingham East) (Lab)
The introduction of the two-child limit by the Conservatives in 2017 has had a devastating impact on child poverty rates. Every day, it affects 1.7 million children, with a loss of roughly £3,500 a year for affected families. A huge 17% of children in my constituency live in families subject to this inhumane and unjust policy.
It is also a policy that has failed on its own terms: a study by the London School of Economics found that it did not increase employment rates among those families affected, the majority of whom are already in work. Meanwhile, the wellbeing of hundreds of thousands of children became collateral damage in this reckless experiment, from living in overcrowded homes to going to bed hungry.
It is utterly disgraceful that this cruel policy has remained in force for so long, and I know that many of our constituents have felt let down that our Labour Government did not act more quickly. I am therefore greatly relieved that the calls that so many of us have repeatedly made are now being heeded, and that the Government are finally scrapping the two-child limit. This would not have been possible without the tireless work of campaigners, who have spent almost a decade fighting for this change.
Experts agree that the removal of the two-child limit is the most cost-effective way to cut child poverty, with the change expected to lift almost half a million children out of poverty by the end of this Parliament. With more than a third of children in my constituency growing up in poverty, I breathe a sigh of relief for the children and families in Nottingham East, and right across the country, who will finally be receiving the support that they should always have had.
Poverty is a political choice, and this Bill proves that we can make decisions that have a real impact, but this must be the start and not the end. I am concerned that around 50,000 low-income families currently affected by the two-child benefit limit will gain nothing when it is lifted in April because of the benefit cap. I am also worried that children whose parents are subject to no recourse to public funds will continue to be at a disproportionately high risk of poverty because they are denied support. The Joseph Rowntree Foundation has also warned that progress on tackling poverty is likely to stall without further action.
Jeremy Corbyn
I thank the hon. Member for giving way. I absolutely agree with her about those 50,000 families not getting any benefit. Does she agree that there needs to be a more comprehensive approach to child poverty, including raising the tax threshold to take the poorest families and poorest people out of taxation altogether, and looking at the extraordinarily high private sector rents in many places, which are way above the local housing allowance and mean that families on benefit end up subsidising their rent in order to keep a roof over their heads?
Nadia Whittome
I thank the right hon. Member for that intervention. I agree with the points that he made, particularly because, from my constituency inbox, huge numbers of constituents are effectively evicted because landlords keep hiking their rents. That is why I back his call, and the calls of Sadiq Khan and Andy Burnham—our mayors—to allow local areas to introduce rent controls. I also back the calls of the Joseph Rowntree Foundation for universal credit to cover the cost of essentials such as food, toiletries and heating.
Addressing people’s material conditions—their living conditions—is how we keep the far right at bay. We must show that we are on the side of working-class people. We must tax the multimillionaires and put money back into our public services and people’s pockets. We must do that at pace, so that no child grows up in poverty, in the sixth-largest economy in the world, so that people can see the difference that a Labour Government can make, and so that our society becomes a happier, healthier and more equal place for all of us to live. That must be our goal.
Susan Murray (Mid Dunbartonshire) (LD)
It seems that with increasing frequency I stand in this place welcoming Labour U-turns, and today I welcome yet another. The decision to lift the two-child cap is clearly the right moral choice, and it will lift hundreds of thousands of children out of poverty.
For those in Scotland, this is a particularly welcome change. There will no longer be any need for the Scottish Government to divert funds from social care and council services to the Scottish child payment. With that in mind, I urge the hon. Member for Aberdeen North (Kirsty Blackman), who is on the Bench behind me, to discuss with her colleagues in Holyrood the merits of using some of the projected £155 million savings to help fund a new health and care hub for the people of Bearsden and Milngavie in my constituency.
I am aware that some people do not support lifting the cap. The change is set to cost UK taxpayers over £3 billion annually by 2030—clearly an enormous sum. Over the past year, we have seen that this Labour Government are set on making working people pay for their changes through tax band freezing, national insurance rises and pension changes. With that in mind, I urge the Government to look seriously at the Liberal Democrat proposals that aim to raise tax revenue. First, banks have made record profits—an estimated £50 billion in a single year—off the backs of hard-working people. We Liberal Democrats believe that it is only fair that the banks pay back some of that money. A windfall tax on these enormous profits could raise £7 billion per year, without placing any more strain on people who are already struggling.
On top of that—I know that Conservative Members will not be happy to hear this again—we need a customs union with Europe. Trade deals with China and India are not unwelcome, but the biggest opportunity is right on our doorstep: an extra £90 billion a year in tax revenue that does not require going cap in hand to those who stand against our values or who facilitate our enemies.
Lifting children out of poverty does not have to put a further strain on working people. We can create a fair tax system in which companies pay their fair share to help those from whom they profit.
Madam Deputy Speaker (Caroline Nokes)
Order. May I gently remind the hon. Lady that this is a very specific debate about the removal of the two-child limit and not a wider debate on tax policy?
Susan Murray
I apologise.
Removing the two-child cap is a vital step, and I hope that the Government choose to listen to more Liberal Democrat proposals.
Steve Witherden (Montgomeryshire and Glyndŵr) (Lab)
Scrapping the two-child limit is a clear win-win. It will improve the living standards of around 1.6 million children overnight and prevent hundreds of thousands more from being pushed into poverty in the years ahead, while also leading to better health, development, educational attainment and economic outcomes. These improvements will shape life chances, ease the pressure on our public services and strengthen our wider economy.
This decision is a testament to the campaigners who have worked tirelessly for years to see the two-child limit repealed, and to hon. Members from across the House who have repeatedly called for change, including those who lost the Labour Whip in 2024 for standing firmly by their principles. I strongly support this measure and will, of course, vote in favour.
The cruel two-child limit was introduced by the Conservative Government in 2015, with the stated aim of making savings in the welfare system. The bottom line is that misdirected interventions, based on cuts rather than investment, will never fix a system that is producing deepening poverty.
Poverty and the cost of living crisis are taking a devastating toll on Welsh communities. Across Wales, thousands of people are struggling to make ends meet, going without essentials and falling further into debt. With just three months to go until the elections, it is clear that this crisis will not disappear, and we should pull every available lever to tackle it. Removing the two-child cap and delivering a robust child poverty strategy are welcome steps, but more must be done.
Neil Duncan-Jordan (Poole) (Lab)
Five in six low-income households on universal credit are going without the essentials. The Joseph Rowntree Foundation and the Trussell Trust say that the welfare system must provide the essentials of daily living— food, heating and so on—if we are to tackle deep-seated poverty in this country. Does my hon. Friend agree?
Steve Witherden
I agree with my hon. Friend, who cites some absolutely appalling statistics. An essentials guarantee would embed the principle that universal credit should, at a minimum, protect people from going without food, heating and other basics. A protected minimum floor would ensure that no one falls below a humane safety net.
I hope that the Government continue along the path of reversing cruel Conservative policies that harm the most vulnerable in our society.
David Baines (St Helens North) (Lab)
This has been a very revealing debate in which Members on all sides of the House have made interesting points, but this matter has unfortunately become quite polarising.
On one side of the debate, we have those who work with children and families and see the hugely damaging impact that the two-child limit has had. The Child Poverty Action Group says that
“scrapping the two-child limit is the most cost-effective way to start to reduce child poverty”.
Dame Rachel de Souza, the Children’s Commissioner, called removing the two-child limit
“a vital first step towards lifting hundreds of thousands of children out of poverty quickly, with the potential to transform their lives.”
I agree with Unicef, which said:
“No child should be punished for the number of siblings they have.”
Scrapping the two-child limit will lift around 2,500 children in St Helens North out of poverty. In this Parliament, we are on course to lift a record number of children—more than half a million nationally—out of poverty. Free breakfast clubs are opening in more primary schools, more than 5,000 families in St Helens North will benefit from extended free school meals later this year, and working families receive 30 hours of free childcare. Yes, that must all be paid for, and I am aware that it will be paid for by taxpayers, but politics and government are about choices.
The shadow Minister, the hon. Member for Faversham and Mid Kent (Helen Whately), said that we should look at the Conservatives’ record in government. The hon. Member for Solihull West and Shirley (Dr Shastri-Hurst) said that government is about choices. Well, the country is well aware of the Conservatives’ record and the choices that they made, which is why they are sat on the Opposition Benches. This Labour Government are choosing to give all children the opportunity to thrive, and we will all benefit as a result. Every single penny spent in pursuit of that goal is money well spent, in my opinion as a taxpayer.
On the other side of the debate, however, the Leader of the Opposition and others do not take a reasonable and reasoned position but use language that is at best insulting and at worst dangerous. In a single stroke, talk of the so-called “Benefits Street” alienates and denigrates the millions of Britons who receive benefits, many of whom work. They are our neighbours and friends; the people we see day in, day out around our communities. As my hon. Friends have said, most of the children who will be helped by the removal of the two-child limit are from households in which someone works—59% of the households affected by the two-child limit are in work.
I agree with those who say that work should pay, which is why I support this Government’s measures to ensure exactly that—measures that are opposed by those who say that work should pay. Try to square that circle, Madam Deputy Speaker, because I cannot—good luck to them. All I ask is that those who talk in that way about “Benefits Street”, and who denigrate millions of people, including children, think about how those children —never mind their parents—might feel when they see those headlines. We can and should debate policy, but we gain nothing from making people feel worthless.
We also hear a lot about “looking after our own.” I agree that we should look after our own and support the people who need help. That is what the Bill would do through investment in children and the wellbeing of future generations, for their sake and for our collective good. I have seen the impact of poverty on families and children throughout my working life, and I have tried my best to help them. I am sure that all Members, on both sides of the Chamber, have met many families who have struggled and dealt with sudden changes in circumstances, whether from ill health, bereavements, job losses or housing crises.
For families with more than two children, the impact is even more acute. It saddens me—frankly, it staggers me—that some would choose to extend that pain tonight. Every child matters; every child counts; every child has a role to play in our country and its future. I will vote tonight for them.
Gill German (Clwyd North) (Lab)
I know all too well the difference this Bill will make for families across the country. In my constituency, I have seen far too many families struggling to make ends meet. Indeed, that reality was a huge part of what drove me to this place from my primary school classroom and a lead role in local government, so I am pleased and proud to welcome and support the Bill today and the tangible difference it will make in Clwyd North and beyond.
It is important to note that the Bill has been fully costed and is part of an overall strategy. Everyone can call for something, but we have made it happen. Across Wales, this change will help 69,000 children, including 3,100 children in my Clwyd North constituency. I cannot overstate how deeply this change is needed and how proud I am to see it delivered under this Labour Government. It is exactly the kind of action we need to support families of all shapes and sizes after 14 years of Tory austerity, which have left far too many children in poverty.
Although it might seem obvious, I want to emphasise that children are part of these families; they do not exist in a bubble, and they cannot disappear when life gets tough. Supporting families makes children better off. Families face a range of circumstances, often unexpected, and every child deserves to have their needs met regardless of that. Poverty in childhood does nothing but cost society in the long term. Children growing up in poverty are less likely to work as adults, and by the age of 30 they earn 25% less on average.
Mr Adnan Hussain (Blackburn) (Ind)
The hon. Member makes a fantastic point. You either get it or you don’t: what we are doing is giving children an opportunity to better their futures. When I was young, my father, who was an engineer, fell ill, and my mother and my family fell to the state. Today, I am an officer of the court, and I am here as a Member of Parliament. Let us give every child a chance to develop and better their futures.
Gill German
I absolutely agree. Every child deserves the chance to fulfil their potential, and it is our responsibility to make that happen.
I am proud that a Labour Government in Wales have led the way with practical initiatives to support children, including free breakfast in primary schools since 2004, protected by legislation since 2013; universal free school meals for primary school children since 2022—I was incredibly proud to be part of rolling that out across Clwyd North; statutory guidance on school uniform branding that has been in place for years; and the school essentials grant, to help with the cost of going to school.
Although those initiatives are invaluable, I have heard repeatedly for many years, including as the chair of the all-party parliamentary group on children in Wales, from organisations such as Barnardo’s Cymru, Citizens Advice Wales and Save the Children Wales that the single most effective step to lift children out of poverty would be to remove the two-child cap. Now, finally, with a Labour Government in Westminster, we have done exactly that, and we have done it in a measured, fully costed way that accounts for every penny needed. Those organisations have long sounded the alarm, and I am proud that it is our Labour Government who have taken action.
As the MP for Clwyd North, I know exactly what I want to see. We need a long-term solution to child poverty. We need parents and families in reliable, fairly paid work to see child poverty off for good. We must rebuild our economy after it was decimated in the worst way. We must create clear pathways into work for young people and those locked out of employment. We must equip people with the skills that are needed for today’s jobs and the jobs of the future, and we must ensure that we have the transport, childcare and infrastructure that are needed so that people can get to work in the first place. I will work tirelessly to ensure that those opportunities are open to people in Clwyd North, particularly our young people. My constituency is ideally placed between two major investment zones, and it is my responsibility to ensure that my residents benefit from the opportunities that that brings.
It is absolutely right that this cap is being lifted here and now, but we must remember that the very best way to ensure that children live well is to ensure that their families are supported and are in fairly paid, reliable work. That must be our relentless focus if we are to reduce our shocking child poverty figures, not just for today, but for generations to come.
John McDonnell (Hayes and Harlington) (Lab)
I am pleased that I have sat through the whole debate today. The speeches I have heard from Members on the Government Benches have been incredibly eloquent and moving, and I am really pleased that we are where we are now in scrapping the two-child limit.
I have listened to the speeches by Opposition Members. Looking back in history, they were reminiscent of the debates on the Poor Law in the early 19th century. If people remember their history, they will know that there was an economist called Malthus at the time. He suggested that if anything was given to the poor by way of support or benefits, it would make them lazy and make them breed, and he thought that the only way to control the population was to starve the poor. That was reflected in the debate today. I hope that one day we will have a civilised society in which those views are not heard, especially the racist views expressed by Reform on how to separate our society, when we know that there are divisions and that we need to bring people together.
Let me say to my hon. Friends and to those on the Front Bench, please do not spoil this Bill now. I do not want to repeat the arguments, but others have raised the issue of the overall cap. If we allow that to exist, it will spoil the Bill; it will not do the job that we need it to do. Scrapping the two-child limit will lift hundreds of thousands of children out of poverty, but, as others have said, if we maintain the overall cap, it will mean that 150,000 children will still be hit. That means that we will not have done our job. I know we can argue that we will come back to that, but the longer we delay, the longer those children will live in poverty.
There must be a way to resolve this issue quickly, and this piece of legislation could be that way. In comparison with removing the overall two-child limit, it is—I say this in inverted commas—“relatively inexpensive”. I think the cost would be about £500 million compared with £3 billion, so we could do it. It cannot be done by an amendment from a Back-Bench Member, because only the Government can bring forward proposals that involve increased expenditure in any form.
I appeal to those on the Front Bench: please do not spoil the Bill at this stage. Try to bring us all together in absolute consensus across most of the House and do the job properly. Lift all children out of poverty in this way, because, as I say, I think it will be relatively inexpensive, and the impact of not doing so will be severe.
I do not want to get into another row over this particular issue. I voted against the two-child limit when it was introduced. I railed against it—I do not think that I have ever been so angry in this House as I was that day—and that is why I have continually voted to scrap it. I know that people are anxious about the vote in the King’s Speech debate, but that was a vote not against the King’s Speech but in favour of scrapping the two-child limit. I understand the argument that it must be done as a component part of a Budget so that we can afford it, but that is why I was disappointed that we had not done it first—because it was so meaningful for me to scrap the limit itself. We are where we are now, and I am really pleased.
I just want those on the Government Front Bench to go that little step further and scrap the overall limit. There are other issues, such as rate controls, but we can come back to those at the next stage of tackling child poverty through our strategy. So I make that appeal. Let me just say that although a Back Bencher cannot table an amendment that raises expenditure, we can table ones that make the Bill dependent on further reports being published within a time-limited period on scrapping the overall limit. I will be open in giving notice now that, if the Government do not bring forward a meaningful amendment, I will seek to work with the Clerks to table an amendment that at least commits the Government to consider and report back to the House on scrapping the overall limit. If necessary, I will push that to a vote.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Order. For the assistance of Back Benchers who still wish to speak, I am about to remove the time limit. [Interruption.]
Josh Fenton-Glynn (Calder Valley) (Lab)
You’re in trouble now, Madam Deputy Speaker!
The Bill will be remembered as one of the proudest moments of this Government’s first term. Before entering this place, I worked on policy around poverty, and it is something that motivates me every day. A constant theme that I have found, when looking at the evidence, is that the simple solutions are often the best. Indeed, it is interesting that Opposition Members often argue for a simplified tax system for the wealthy, but when it comes to benefits, they have done nothing but buttress the system with more and more complex rules.
Poverty ruins lives. We know that growing up in poverty leads to worse life outcomes, including poorer educational outcomes. Being in poverty as children leaves us three times more likely to be in poverty as adults, and the longer the period of deprivation a child goes through, the worse their chances will be as an adult. It is clear that the impacts of child poverty are deep-rooted. Lifting the two-child benefit cap is one of the single most effective ways to change that trajectory and give people a better outcome for the rest of their lives. If someone is constantly hungry, cold or in damp housing without repairs, the effects on their health, self-esteem and chances are long-lasting.
When kids grow up in poverty, the economy loses out too. Even if Members choose not to care about worse outcomes for children—something I think we have a moral imperative to care about—it is a question of cold economic logic. In 2023, my old employer, the Child Poverty Action Group, estimated that the cost of child poverty was £39 billion a year, and that investing to solve the issue
“would bring similarly large gains to the economy”.
The lifting of this cap alone will ultimately save £3.2 billion a year.
This is the first piece of legislation passed on child poverty since the Child Poverty Act 2010. I remember working on the passage of that Act, and how the now Lord Cameron committing to halving and then ending child poverty. Indeed, he accepted the evidence-based view that relative poverty is appropriate for measuring child poverty, because children with less money are less able to take part in the society to which their friends belong, and are less able to achieve in the same way. It was a bold way to face the electorate in 2010, but it was not matched at all by the Conservatives’ record in power of abject failure. The two-child limit pushed hundreds of thousands more children into poverty. This Bill is shot through with the needs created by the last Government’s 14 years of failure. UNICEF found that between 2013 and 2023, the UK saw the largest increase in relative poverty out of the 37 high-income countries that it measured—an increase of a third. That is a larger increase than across the EU.
We have heard a lot from Members across the House about people in work. When I was working at the Child Poverty Action Group, we had a killer stat. We used to say, “One third of children in poverty have a parent in work.” By the time that lot left government, two thirds of children in poverty had a parent in work. Even if a child does not have a parent in work, I do not believe that the sins of the parents are visited on the children. I do not believe that children have control over where they are born. We hear about choices; should children choose to be born to a different family? The two-child benefit cap is social and economic vandalism that we will reverse when this Bill becomes law. The removal of that cap will lift 450,000 children out of poverty, with 2 million children set to benefit overall. Think about what that means—the lives changed and the futures opened up. If nothing else moves Members, think about the savings to the public purse from fewer children growing up facing the barriers that poverty causes, which follow them into adulthood.
There is more to do. My hon. Friends on the Front Bench will know that I am likely to be very annoying about the further things we have to do, but I welcome the Government’s support for free breakfast clubs, expanding childcare, family hubs and getting more young people into work. I look forward to reviewing how those programmes bring children out of deprivation. Today, I could not be prouder that I will walk through the Division Lobby to give millions of children a fairer start.
Sam Rushworth (Bishop Auckland) (Lab)
The last time we debated this issue, I took many interventions from Conservative Members—there are fewer of them in the Chamber today—who wanted to know whether I would support lifting the two-child cap. As I said at the time, increasing the household incomes of children in poverty is one of several things we need to do to tackle the scourge of child poverty in places like Bishop Auckland, and I trust that the Government’s heart is in the right place on this issue. As such, I am delighted by the proposals they have brought forward and I will enthusiastically vote for the Bill. It will lift 450,000 children out of poverty. Some 2,310 households in my constituency are currently affected by the two-child cap.
As I said, the Bill is only one measure; it needs to be combined with others. We have heard often in this debate that removing the two-child cap is the single quickest way to lift children out of poverty. That is because we measure poverty by household income, but poverty is multi-dimensional, and it is important that we address its multifaceted aspects. Combined with other measures, the Bill will make a real difference. Those measures include: the Renters’ Rights Act 2025; the Employment Rights Act 2025; increases in the national minimum wage; the falling interest rates that are cutting mortgages; the new rules on school uniforms; the 30 hours of free childcare; free breakfast clubs in every school to reduce the early morning stress on working parents; the extension of free school meals to a further 4,500 children in Bishop Auckland; the extension of the warm home discount to more households; and investment in youth hubs, family hubs, and arts and culture. All those things will help to support children in poverty, which is why I am proud to be part of this Labour Government at this time.
At a roundtable in my constituency shortly after I was elected, we invited educators and charities—people who work with children—to talk to us about their experience of child poverty. There were tears in the room as headteachers talked of having to bring food into school to feed hungry children; of a child whose uniform was wet because there was no glass in the window of their home; of children living in cold and damp homes; and of children in Shildon who are excluded from extracurricular activities because they have to get the only free bus home, as their parents cannot afford the £1 bus fare to take a later bus. I came here today to speak on behalf of those children and to be their voice.
I will address some of the arguments that we have heard against the Bill. Too much of this debate has focused on party politics, rather than children. The Opposition seem to be simultaneously arguing that we should have done this sooner and should not be doing it at all. As I have engaged with the Government over the past 18 months and had many conversations, including in No. 10 and with Ministers, I have been reassured throughout that the Prime Minister has a strong personal commitment to eradicating child poverty, so it did not surprise me at all to see this legislation brought forward.
The opposition to what we are doing today is based on falsehoods. The first is that the Bill is about supporting children in workless households. As my hon. Friend the Member for Calder Valley (Josh Fenton-Glynn) said a moment ago, the children are not to blame. We can never blame a child for being born in a poor home. Also, 59% of the families affected by the two-child cap are families in work. We also know that universal credit requires people to show evidence of actively seeking work. People cannot simply sit on universal credit—it is not that easy. We know, too, that it is often a temporary measure.
I think about my family. Twelve years ago, I was working as a gardener on just above the minimum wage while I was completing my PhD, and my wife was working as a carer. We relied for a time on having our income topped up by tax credits, as they were called then. I almost crossed out that bit of my speech, because I know I will get an onslaught of abuse just for saying so, such is the rhetoric in our country right now, demonising people who ever draw on our social security system. My twin sister became a single parent, not of her choosing, and raised three children, two of whom had a disability. I remember her telling me that when she moved into her council house, a friend told her that she could paint the floor and put duvets at the windows to keep it warmer. My sister put herself through a degree in pharmacy at Durham University and now works in my constituency as a pharmacist for a GP practice. My brother, who was the highest earner in our family, died at the age of 35, leaving behind three children. People fall on hard times, and when they do, a caring society should be there for each other.
One of the other lies we are hearing in this debate is that the Bill is funded by a tax on workers. Other parties seek to divide people, telling those who are just about managing that their taxes are paying for people who are not working, and it is not true. We know what is funding this Bill and many other things: a fairer tax system, abolishing the non-dom status, a mansion tax, and the remote gaming duty, which will generate an extra £1 billion. It is about fairness and who pays.
Finally, there is this lie that keeping children in poverty is good or necessary for the economy. It is not. The welfare bill increased by £88 billion under the Conservative Government, despite the real value of welfare decreasing. They oversaw a real-terms decrease in living standards. That led to a generation of children who were malnourished, who experienced family breakdown and who were denied opportunities to become a generation of adults realising their full potential. We had an increase in sickness and in days lost to sick pay, an increase in mental health disorders and a 250% increase in looked-after children. We have rising cost pressures on Government as a result of those policies.
As I finish, I must turn my attention to the comments made by the hon. Member for Runcorn and Helsby (Sarah Pochin), who is no longer in her place. I intend to write to her, because I was deeply offended by the suggestion that people who were not born in this country, but work hard, are somehow less. My wife was not born in this country; she came here as a teenager. She worked in a meat factory and as a carer. More recently, she went through university and now works as a midwife in our NHS. I am so proud of her, and I find the idea disgusting that she should somehow be less entitled because of her birth. Reform needs to rethink that.
To conclude, I will be voting with the Government tonight, and I re-emphasise that this is one of several things that we need to do in our national mission to end the scourge of child poverty in our country once and for all.
Lizzi Collinge (Morecambe and Lunesdale) (Lab)
When the Labour Government came to office, 4.5 million children were living in poverty, and I believe that that is a moral stain on our nation. It has been a central mission of this Labour Government to tackle child poverty in all its forms. They are taking a range of measures, like introducing breakfast clubs. We have had some fantastic pilots of those in my constituency, and we have heard from schools that provide them that attendance is improving as a result. That is yet another impact of tackling childhood shortages. The Government are also extending free school meals to more children, while family hubs will help families who are struggling to get the support they need, and of course, there is more childcare support for working parents, who are too often kept out of work by the high costs of childcare.
Today, though, we are talking about ending the two-child limit on universal credit. This measure alone will lift nearly half a million children out of poverty, and in my constituency of Morecambe and Lunesdale about 1,900 kids will benefit. It is not just the right thing to do, in and of itself; the evidence shows that tackling poverty in childhood is more cost-effective than mopping up the damage later—the damage of poverty that was outlined so eloquently by my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams). The fact is that poverty kills. It is as simple as that.
Some will say that poverty is caused by fecklessness or laziness, ignoring the 70% of children affected by this limit who live in working households; ignoring the fact that 15% of those affected by the cap are mothers with really young babies—mothers who we would normally not expect to work; ignoring the significant number of people affected who are in ill health or have caring responsibilities; and ignoring the fact that the cost of living crisis, which was brought upon us by the Conservatives and by reliance on foreign gas, means that people who could afford their children when they had them are now struggling to put food on the table.
About six months after the election, I knocked on a door in Morecambe, and it was opened by a lady who was really distressed. Once I got talking to her, it turned out that she had five kids. She said to me, “I could afford those children when I had them. I would never have had these children had I not been able to afford them.” She worked days, her husband worked nights, and she was on the minimum wage. They were struggling to prevent their children from finding out just how difficult a financial situation they were in. I was able to tell that lady that in a few months’ time, thanks to the Labour Government, she would receive a pay rise, because we were putting the minimum wage up—yet another measure that we are taking to tackle child poverty.
Josh Fenton-Glynn
One of the most distressing things that I discovered when I was working at Church Action on Poverty and talking to parents of children in poverty was how often mothers went without food. My hon. Friend has talked about families struggling so that their children did not find out. Does she agree that that is what we are changing today, and that that is the reality of this policy?
Lizzi Collinge
My hon. Friend is entirely right. Parents, in my experience, will do anything to protect their children from the harsh realities of life. It is parents who go without food. It is parents who have to go to the food bank. I remember the first time I met the people running the food bank in Morecambe, in 2017. I walked up to them and said, “One day, I will put you out of business.” And they said, “Thank you”, because their strategic aim is not to exist. Food banks should not exist.
Some of the people who oppose the lifting of this limit are also willing to ignore the fact that the policy itself did not work on its own terms. It did not limit the number of children born, but merely condemned them to living in poverty. They are also willing to ignore the evidence that dealing with poverty in childhood is much more cost-effective than mopping up later. It prevents huge costs later down the line in terms of education, health or indeed the criminal justice system.
I am not saying that there are no feckless parents. Of course there are feckless parents, and there have always been feckless parents. I remember my great-grandma telling the story of having to go to the pub on a Friday night to try to get the housekeeping money off her drunkard father. She used to tell it as a funny story with a smile on her face, but it was not funny then and it is not funny now. I was really quite shocked at Reform saying that it would keep the two-child limit on universal credit and instead put that money into reducing the cost of beer. I love a drink—do not get me wrong—but I cannot help but think that, if Reform Members were around 100 years ago, they would have been standing with my drunkard ancestor, rather than with the little girl with her hand out for the housekeeping money. Do we condemn hundreds of thousands of children to poverty because there are a few feckless parents?
John Slinger (Rugby) (Lab)
Does my hon. Friend agree that fecklessness is not a trait exhibited only by poorer people in our country?
Lizzi Collinge
I absolutely agree with my hon. Friend that fecklessness is not limited to any one socioeconomic group. It is interesting how people born into great wealth consider their position to be due only to their very hard work, yet they consider it to be other people’s own fault if they are born into poverty. That is really quite shocking.
More than 1 million children live in households unable to afford even the most basic necessities of life. There are parents choosing between heating and eating, children doing their homework on the floor in housing that is too crowded to provide a space to study, whole families staying in one room because that is all they can afford to heat, and kids wheezing due to damp. What compounds this heartbreak is that childhood poverty festers and grows. It infects people’s prospects in education, health and employment across their whole life.
Rather than tackling that, discussions about welfare inevitably descend into conversations about merit: who deserves help and who does not. These are children we are talking about—children entirely reliant on adults for their existence and their support, and entirely reliant on Governments such as ours to make sure they are looked after if, from no fault of their own, their parents do not have enough money for the necessities of life.
If this Victorian attitude to the deserving and undeserving poor had won the day previously, we would not have had any of the public services that we now take for granted. We would not have had free education, because why should parents not just pay for education themselves? We would not have had the NHS, because why should people not just pay for doctors themselves? As we know, Reform Members would be very happy to get rid of the NHS and bring in a private insurance system. None of us earned those things through our own merit; we inherited them from people who recognised that everyone deserves a good chance in life and the chance to thrive and succeed, whether by starting their own business, getting an education or doing whatever it is that will make their life a good life. That is the obligation we have to our children.
The Joseph Rowntree Foundation and others have shown that scrapping the two-child benefit limit could drive the single largest fall in child poverty in a single Parliament. My local Citizens Advice has done a brilliant report saying that scrapping the two-child limit is the fastest and most cost-effective intervention to tackle child poverty.
Stuart Anderson
The hon. Member is making an impassioned speech. If the Joseph Rowntree Foundation says that this will be the biggest change made in a Parliament —a full parliamentary term—why are the Government doing it now after refusing to do it 18 months ago?
Lizzi Collinge
That is actually a reasonable question. The answer is that we had to make sure the country could afford it and we had to take a strategic approach to tackling child poverty. What we were not going to do, given the absolute state of the economy when we came into government, was make very quick decisions on such a scale. We did it properly, carefully and as part of a strategy. [Interruption.] I am interested by Opposition Members’ interpretation of reality.
Let us not forget—moving on to something else that seems to have been missed in this discussion—that the families hit hardest by the two-child limit are those who spend the largest share of their income on absolute essentials. Lifting those families out of poverty not only reduces hardship, but actually boosts the local economy in the same way that raising the minimum wage does. In Morecambe and Lunesdale, I have thousands of fantastic small local businesses who rely on local people having enough money in their pockets to go out and spend, whether it is in the corner shop, the local supermarket or the clothes shop on the front where I get my kids’ school uniforms. They rely on people spending and we know that people who are hard up spend every single penny that they have. I have spoken in this Chamber before about the cost saving of prevention. This measure is no different. Investing in our children now pays dividends later, improving educational outcomes and raising adult earnings.
Even if, in the face of all contradictory evidence, we accept the myth sown by the right that all the parents affected by the cap are somehow scroungers and feckless, I still do not believe that their children should have to live in poverty. Using children as pawns to influence parental behaviour or illustrate moral lessons not only does not work, it is profoundly unjust. And it did not work. Even by its own logic, the two-child benefit limit has been woefully ineffective. Back in 2019, a cross-party Work and Pensions Committee found “no evidence” that it was working as intended. It had next to no effect on employment rates and hours worked in affected households, and the stated effect on birth rate is so tiny that it is doubtful that it is greater than the margin of error in the data. The cap has not led to greater employment rates or a higher number of hours worked. What the cap has done is make childcare and travel costs an even higher barrier for those households who are trying desperately to work more.
The two-child benefit cap also assumed that all pregnancies are planned, in full knowledge of the Government’s social security policy. I do not know about others, but most people I know are not over the details of social security policy. We know that it is simply not true that all pregnancies are planned. We know that contraceptives fail. Stuff happens. I remember when Tony Blair had an oopsie baby in the ’90s. With apologies to the Blairs for referring to them, I remember my dad saying, “Well, if the Prime Minister can’t always get it right, how we do expect every single person in the country to do so?”
We also know—it became really clear from the previous Conservative policy—that a startling number of children are conceived through rape. The policy meant that traumatised women were having to disclose their rape to faceless bureaucrats just to try to get enough money to raise the child who had been conceived through rape. That is surely compounding the trauma of survivors of sexual assault.
Finally, our country’s future depends on investing in the potential of our children—all our children, wherever they were born and however they were conceived. Today, we are saying that there are no second-class children in Britain and that under a Labour Government child poverty is not an inevitability. It is a choice and we choose to end it.
Dr Jeevun Sandher (Loughborough) (Lab)
Madam Deputy Speaker, it is a pleasure to be able to speak for the next hour, while there is no time limit. [Laughter.] Buckle in!
I want to start today’s speech by first addressing what the Conservatives said and why we need state support to help end child poverty in the technological era we are in. I also want to make clear why we are ending the two-child limit. In the economic sense, yes, it is a pounds and pence issue—we save more money by feeding kids today—but far more importantly, morally no child in this country should be going hungry.
Before I get to that, I would like to share with the House where I spent two years of my life between 2016 and 2018, when I was the economist working in Somaliland’s Ministry of Finance. I was there during what was then its worst drought in living memory. When drought came to Somaliland—one of the poorest nations on earth—it meant failing harvests, dying livestock and rising hunger. I will never forget what that hunger looked like and what it felt like for a whole nation.
I could understand what was happening in Somaliland, even if it was incredibly difficult, but I was shocked and appalled on returning to this country to see children going hungry here—in the fifth richest nation on earth. Those children went hungry after the introduction of the two-child limit. Poverty went up in the largest families, who were affected by the two-child limit, and child hunger went up. Food bank parcels were unknown in my childhood; there were a million handed out in 2017, and three million by the time the Conservatives left office. Most shamefully of all, child malnutrition has doubled over the past decade. That is the shameful legacy of the two-child limit and what it meant for child hunger in this country.
Rebecca Smith (South West Devon) (Con)
Is the hon. Gentleman aware that the Trussell Trust was founded in this country in 2000, under a Labour Government, and that the Department for Work and Pensions did not recommend that it be offered as a solution to families in need at the time? It is one thing to talk about food banks, but it is important to ensure that we acknowledge when they were first set up in this country.
Dr Sandher
Did the guidance change between 2016 and 2024? Could the hon. Lady explain to me from the Opposition Front Bench why the number of food bank parcels tripled from the introduction of the two-child limit to 2024? I will give way if so.
Rebecca Smith
Well, without having the statistics in front of me right this second—[Interruption.] No, let me finish. We had the global pandemic, when there was a huge need for food banks. In fact, it was the Conservative Government who invested hundreds of thousands of pounds in food banks to ensure that nobody went without. The council for which I was a cabinet member at the time used the funding from the Conservative Government directly to ensure that poverty did not increase over the covid pandemic. If numbers went up, we have to ensure that that fact is reflected.
Dr Sandher
The rise happened before covid; it happened after the two-child limit was introduced. I agree with the hon. Lady on one point: she is not across the statistics.
Opposition Members have advanced an argument that I think is fair. They ask why we do not just create lots of jobs, which is the way to get out of poverty. The way to get out of poverty is through work, right? I want to take that argument head-on. We are living in a different technological era. In the post-war era, we had the advance and expansion of mass-production manufacturing, which meant there were good jobs for people as they left school. They left school, went to the local factory and earned a decent wage, meaning that they could buy a house and support a family.
Then, in the 1980s, in this country and indeed across high-income nations, we saw deindustrialisation and automation, bringing the replacement of those mechanical jobs with machines. Like other high-income nations across the world, we have been left with those who can use computers effectively—high-paid graduate workers—and lots of low-paid jobs everywhere else. It is not just us confronting that problem, although it is worse here because of decisions made in the 1980s; we are seeing it across high-income nations. As a result, state support is needed to ensure that those on low pay can afford a decent life.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
Will my hon. Friend give way?
Dr Sandher
In a moment.
This is not, by the way, the first time in history that we have confronted this problem. In the early part of the industrial revolution, between 1750 and 1850, we saw machines replace human beings. What did we see then? The economy grew by 60% per person, but people had less to eat. Men were shorter in 1850 than in 1750 because of the change of the technological era. I think my right hon. Friend would like to intervene.
Gareth Snell
I am an hon. Friend, not right honourable, though I welcome the promotion.
I have listened to this debate from outside the Chamber this afternoon and heard many Conservative Members talk about how the route out of poverty is through work. I absolutely and fundamentally agree with that, so I find it completely incongruous that whenever they have had the opportunity to vote for our make work pay Act, to increase stability in work and create well-paid jobs, they have voted against it. Indeed, only last week, the shadow Secretary of State made an argument for cutting the minimum wage for young people. How does my hon. Friend think that someone can argue, on the one hand, for work as a way out of poverty, but on the other, restrict the opportunities for work, push down pay and reduce the opportunities created for working people?
Dr Sandher
I agree with my hon. Friend. Conservative Members have often spoken about their employment record in office and how many jobs were created. Yet while that happened, child poverty and child hunger rose. Something is not right in their model of the world and there is something to review there.
There is no law of economics that says that just because someone works hard and is a decent person, they will earn a wage that can support a family. That is not the technological era we live in today. That is why we are ending the two-child limit today and I am so proud that we are doing so.
In an economic sense—in pounds and pence—as Labour Members realise and have stated, when we ensure that children have enough to eat, they learn more today and they earn more tomorrow. The cost of child poverty every single year is around £40 billion. The cost of ending the two-child limit is about £3.5 billion. It makes sense to invest today so that our children can eat and learn more, yet this is not just a matter of pounds and pence; as an economist, I often talk about that and I get it, but it is about so much more. This is about the moral argument. No child in this country should go hungry—no ifs, no buts and no exceptions. That is why I am so proud of this Bill, I am so proud to vote to end the two-child limit and I am so proud to be sat on the Labour Benches.
John Slinger (Rugby) (Lab)
The child poverty crisis that we inherited from the previous Government is, indeed, stark. In 2014, 16.5% of children were in relative poverty and by 2024, that had risen to 21.8%. The simple truth is that Conservative Members oppose a measure that lifts children out of poverty. They have not changed.
Successive Conservative Governments—and yes, the Liberal Democrats, who cannot get off scot-free, given the coalition—carried out policies that led to hundreds of thousands more children being pushed into poverty. To be precise, the figure is 900,000 more , leaving 4.5 million children living in poverty across our country. That is a shameful number, as large as the population of countries such as Croatia or Ireland. By the end of the Conservatives’ time in office, almost a third of children in the UK were living in poverty. That tells us exactly who they prioritised and who they did not. Even now, they would undo progress.
Stuart Anderson
Will the hon. Member say what statistic backs up the statement that a third of the children in the UK were living in poverty?
John Slinger
The number of children—[Interruption.] The number of children in poverty rose substantially.
Antonia Bance (Tipton and Wednesbury) (Lab)
I am sure that my hon. Friend will agree that the statistics on below-average-income households are published annually by the Department for Work and Pensions, which is the source of the statistic that he so cleverly deployed in the course of his argument.
John Slinger
That is indeed the statistic that I was reaching for in my notes, and I thank my hon. Friend.
Even now, Opposition Members would undo progress. They would reintroduce the limit; they would make things worse. And as for Reform UK— [Hon. Members: “Where are they?”] Exactly! Where are they? We have seen populist policy hokey-cokey already today. It was probably taking place while the hon. Member for Runcorn and Helsby (Sarah Pochin) was speaking.
Josh Fenton-Glynn
The Reform policy really is quite something, as I am sure my hon. Friend would agree. In fact, if someone lost their child benefit because of the Reform policy, it would take 345 pints a week to make a saving. So it does not really help anyone, but it does hurt those in the most poverty. Will my hon. Friend recommend that people do not listen to the easy answers of Reform and actually work to make people’s lives better?
John Slinger
I thank my hon. Friend. I was very moved by his speech, which he delivered from a position of great knowledge and great concern built up over a very impressive career. He is absolutely right. I, of course, would not recommend people to take too seriously policies that are, as I said, populist policy hokey-cokey. To scrap or to reinstate? It is hard to tell. What we have seen from Reform UK is the concept of political triangulation being stretched absolutely to breaking point. In fact, it has broken, with some of the populist nonsense that Reform has spoken about in recent days.
Dr Sandher
I like a pint as well, as it happens—sometimes more than one—but I think it is fair to say that parents across this country will not appreciate getting 5p off each pint they buy, knowing that it will make more children hungry. I am pretty shocked by the trade-off there. I agree with supporting our pubs, and I will do it every single weekend as part of our patriotic duty, but that is not fair. There is another, more damaging, side to this which says that if we just deport and attack enough people, it will make us richer. That is absolutely something that we on this side of the House should reject, and something that Members on the other side of the House sometimes reject as well.
John Slinger
I could not have put it better, particularly the point my hon. Friend made about enjoying a pint. I too enjoy a pint, but linking something as serious as tackling child poverty to the price of a pint in our pubs is trivialising an incredibly serious topic—[Interruption.] The hon. Member for Hinckley and Bosworth (Dr Evans) is speaking from a sedentary position. Would he like to intervene?
Dr Evans
I just see the irony of the hon. Member talking about linking this to alcohol, which is a serious problem. Gambling is a serious problem as well, and his party has directly linked this to gambling, even though this is not a hypothecated tax. Could he explain the dichotomy between the two?
John Slinger
It is perfectly acceptable and reasonable for a Government such as ours to take measures in Budgets to provide the resources necessary to enact a policy, as this Bill would do, that will lift so many children out of poverty. I think the hon. Member makes a fairly fatuous point, if I may say so.
Sam Rushworth
Does my hon. Friend share my confusion at the point that has just been made? Does it not illustrate that all of this is about choices, and that the choice that is being made on this side of the House is, yes, to increase the tax on gambling and on mansions in order to decrease child poverty? The choice that Reform would make would be to increase child poverty for 5p off a pint.
John Slinger
I am assuming that the hon. Member for Hinckley and Bosworth is opposing the policy before us today. So you actually do not want to take the measure that we are going to take—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. “You”, Mr Slinger—I have mentioned this to you so many times. Let us start again.
John Slinger
I apologise, Madam Deputy Speaker. The hon. Gentleman is opposing the policy that will reduce child poverty by an enormous number.
Conservative Members have not really even tried to defend their record. Perhaps that is because it is indefensible. Their decisions were not accidents; they were choices. The consequences were known, the damage was predictable and the outcome is now painfully clear. Years of ignoring child poverty have left this country with many problems, including the number of children not in education, employment or training. That is an inheritance that this Government are now tackling, not least through the excellent work of Alan Milburn and his investigation into work and child poverty that was commissioned by my right hon. Friend the Work and Pensions Secretary.
Children are being condemned to a lifetime of economic inactivity, which is bad for them and their future wealth. As the “Keep Britain Working” report found, someone leaving the workforce in their 20s would lose up to £1 million in earnings. It is also bad for their health. Having four more years in education on average relates to a 16% reduction in mortality rates and reduces the risk of heart disease and diabetes. It is also bad for the country—all that untapped potential and all that unnecessary benefit spend.
Graham Stuart (Beverley and Holderness) (Con)
Will the hon. Member give way?
John Slinger
I will not give way.
The arguments we heard about parental responsibility, the claim that people have children to get benefits, are short-sighted, wrong and, frankly, insulting. The shadow Secretary of State, the hon. Member for Faversham and Mid Kent (Helen Whately), could not cite any evidence for her claims.
David Baines
My hon. Friend is making a powerful speech. He says no evidence was given for those arguments. That is because there is no evidence, and yet opponents of the policy continue to make the arguments. Does he agree that it is damaging, dangerous and insulting to children and to families that are working hard up and down the land to do the best they can?
John Slinger
I agree with my hon. Friend that it is insulting, and it was surprising that the shadow Secretary of State could not cite any evidence at all.
Regardless of any two-child limit, parents will of course still have children, and those children must never be punished for the circumstances of their birth. The best way to support them, the single most effective way to lift them out of poverty, is this Bill.
Some Members across the House and some across our country implied that my right hon. Friend the Chancellor does not care about child poverty. They implied and claimed that she does not care about economic inactivity and our moral duty. That accusation was not just wrong; it was deeply disrespectful, particularly given her long record of campaigning on these issues.
Graham Stuart
I was not here earlier in the debate, so please forgive me, Madam Deputy Speaker. The hon. Gentleman talked about Members being able to back up their assertions. Who was it in the debate who suggested that the Chancellor did not care? I have never heard anyone on the Opposition side of the House saying that she does not care. Whether she is capable of dealing with it is a different matter entirely, but who was it who said she did not care, because I am sure we would all want to take it up with them and tell them to change their line?
John Slinger
I thank the right hon. Gentleman for his intervention; I always enjoy them. I found this one particularly amusing—and I very much respect and like the right hon. Gentleman—given that I was not actually quoting. I did not say, “And I quote”. I am allowed to use words without having to justify every single one. [Interruption.] The right hon. Gentleman knows full well that I was referring to the general view of hon. and right hon. Members in this House. [Interruption.] I think I have dealt with that—it was a good effort, but I will move on.
This measure, made possible by the policies of my right hon. Friend the Chancellor—let’s not forget that—will lift 450,000 children out of poverty, and I am proud to say that that includes 2,020 children in Rugby. Let me be clear: lifting the two-child limit is not the whole answer; it is part of the Government’s wider mission. I say to people outside this Chamber, “Do not let the doomsters, the gloomsters, the cynics and the propagandists mislead you.” In just 19 months, as part of that wider mission, this Labour Government have achieved the following: day-one rights for paternity and parental leave; Best Start family hubs bringing health, parenting and wellbeing under one roof; 30 hours of funded childcare from nine months old; free breakfast clubs, with 405 children in my constituency of Rugby benefiting from the April roll-out; minimum and living wages up; record investment in schools; apprenticeships reformed; full funding for apprenticeships for under-25s in our small and medium-sized enterprises; the youth guarantee, mentioned by the Chancellor in the recent Budget; ensuring routes into work, training and education; and Young Futures hubs and youth hubs. May I please ask Ministers on the Front Bench whether I can have one of those hubs in Rugby? Helping children is about more than lifting the two-child cap. This Government do not, and should not, define our moral purpose solely by the pounds we give to those in need—although we should of course give money to those in need. Unlike the Conservatives, we will do those things I listed and, of course, spend money on lifting the two-child limit.
We are glad to do that because it is not just about poverty in financial terms; it is about the poverty of aspiration for our children, which all too often results from the policies of the parties of the right, and it is about the poverty of ambition for what a Government can and should do to unleash the potential of all children. We reject that poverty too. Opportunity, prosperity and dignity for all cannot come—whether through the animal spirits of the economy or the progressive policies of a Government such as ours—unless child poverty is ended once and for all.
In conclusion, we are the Labour party; we want to give young people the skills and opportunities, and to create the ecosystem, that will unleash their potential. That starts by preventing their early years from being blighted unnecessarily by poverty. We also stand for compassion and support for those who really need it, and that is what we will provide. Ending the two-child limit, and the wider measures I have outlined, are vital to ensuring that our young people become the architects of their futures, not merely tenants living in a world shaped by the older generations, by vested interests and, indeed, by those who are opposed to this Bill.
Andrew Pakes (Peterborough) (Lab)
I first put on record my thanks to my Deep Heat patch; three hours of bobbing with a bad back has been a very special introduction to this debate. I welcome the opportunity to highlight an issue that is the driving mission of so many of us and the reason why we are in this House.
Like many Members, I had the opportunity over December to attend services at some of the wonderful churches across Peterborough. That was not just Christmas spirit; there is nothing more majestic than the raising of voices “to the newborn King” by a packed congregation in a 900-year-old cathedral. At every service, I met congregations dedicated to helping others in my city. Child poverty was at the heart of those conversations—the impact of child poverty on the children themselves, but also its corrosive impact on parents and on all of us in society. Nothing goes to the heart of Labour’s values more than addressing the corrosion that poverty causes in young lives, and I am deeply proud to speak in this Second Reading debate on one of the most important pieces of legislation that this Government are bringing forward.
I would like to use this opportunity to thank the Peterborough food bank volunteers and our Care Zone furniture volunteers, whom I have met consistently since being elected, for the incredible work they have done to support and help families and children in need. I also thank the volunteers at KingsGate community church, who do so much to help families in need with food and debt advice, and to navigate the still-too-clunky networks of the DWP and the state.
That help is needed; we all know the national statistics. The hon. Member for South West Devon (Rebecca Smith) mentioned the Trussell Trust, and I looked up the figures in preparing my contribution: in 2010, the last year of the Labour Government, the Trussell Trust reported that just over 43,000 emergency food parcels were handed out; in the last year of the Conservative Government, more than 3 million food parcels were handed out.
Rebecca Smith
No one has ever told me that they would adore to hear me speak in this place! I completely appreciate the point that the hon. Gentleman is making, but I too have been doing some research while this debate has been going on. It is worth noting that those food bank numbers have increased because they only count Trussell Trust food banks, so the more food banks join the Trussell Trust network, the more those numbers go up.
In my city, where, as I may have mentioned, I held the cost of living portfolio during the pandemic—[Interruption.] There’s no need to yawn! My city did not need the additional food bank that was set up, and it ended up having to send food away. If that food bank had joined the Trussell Trust, it would have added to those numbers and distorted the figures. While I am not saying that there might not have been an increase, I believe it is worth recognising that particular point.
Andrew Pakes
It is a very unusual way to defend food bank use to say that it is because poverty is now being counted in a better way. The Trussell Trust is very clear that when Labour was last in government, food banks existed as an emergency provision for when people fell through the cracks of the welfare system. The industrialisation of food banks is shocking, as is the justification of it by the Conservatives.
Marsha De Cordova (Battersea) (Lab)
I commend my hon. Friend for his speech. We all have to admit that when the Conservatives came into government with the Liberal Democrats in 2010, they unleashed their social security cuts on our communities. That is what has devastated our communities. Food bank use went up, child poverty went up and disabled people’s rights went down because of the policies of the Conservative Government. Does my hon. Friend agree that it is only this Labour Government who are committed to eradicating child poverty and ensuring that many children, including thousands in my Battersea constituency, will be lifted out of poverty as a result of lifting the two-child benefit cap?
Andrew Pakes
I wholeheartedly agree. There is something wrong with society when Members of Opposition parties, including my Liberal Democrat colleagues, do not mention the long-lasting impacts of austerity on our public services, our welfare provision and the support given to families.
Chris Vince (Harlow) (Lab/Co-op)
I thank my hon. Friend for recently welcoming me to the Peterborough museum and art gallery, where we went to a “Dr Who” exhibit and discovered that Davros was considering defecting to Reform. I thank my hon. Friend for his excellent speech. I recently talked to the chief executive officer of the food bank in Harlow, and he spoke of the big difference that this policy will make. Does my hon. Friend agree that the people who work for food banks want them not to be needed any longer, and that this Government should try to achieve that?
Andrew Pakes
I agree with my hon. Friend. I put on the record my tribute to all food bank volunteers, not just for holding me to account and making sure that I am here today to support policies like this, but for making the case that he so powerfully makes: they want food banks to no longer exist. Whenever I speak to Christians Against Poverty, churches, mosques, temples and so many of the faith communities that are important to the social infrastructure that holds poverty at bay for so many families, they all say to me that they wish that they did not have to provide food banks and that they could spend more time doing other things. It is our job, starting today with this Bill, to put that into practice for them.
Graham Stuart
The hon. Gentleman is being most generous with his time. I agree with the hon. Member for Harlow (Chris Vince). Does the hon. Member for Peterborough (Andrew Pakes) agree with him that it would be a sign of this Government’s success if we saw fewer food parcels being put out by food banks by the end of this Parliament than we do today?
Andrew Pakes
Certainly. Many of my food banks would support the single policy that we are voting on today, so I hope the right hon. Gentleman will join me in the Lobby tonight to vote to eradicate food banks. This Bill will put money into the pockets of families. It will not just lift their children out of poverty but—as my hon. Friend the Member for Morecambe and Lunesdale (Lizzi Collinge), who is no longer in her place, said—put money into the local economy.
If we ever wanted a symbol of the legacy of Tory failure in government, it is this: in my city of Peterborough alone, nearly 43% of children are growing up in poverty. In the North ward of Peterborough, which is a two-minute walk from my house, six out of 10 children are growing up in poverty. That is a stain on our society, and I am dedicated to eradicating it.
I am proud of the work that my council does, but this policy will help. I am proud of the focus of Peterborough city council, pushed on by groups such as Peterborough Citizens, which has ended the practice of children sleeping in bed-and-breakfast and hotel room accommodation. I was equally proud in the autumn to welcome the Prime Minister to Welland Academy, where he made the national announcement of the roll-out of free school meals for all children on universal credit. An incredible 16,000 extra children will benefit from free school meals this September because of the action taken by this Government, which will be delivered in the coming months.
We all know that we need to do more. The Bill is an investment in our country’s future. The single act of voting for it will lift 450,000 children out of poverty, including 10,000 in Peterborough. As many hon. Friends and comrades in this place have said, almost half of the families on universal credit are in work. Child poverty makes it harder for children to get on in life, and that hurts our economy. I am pleased to see that some Conservative Members have returned to the debate. I thought for a while that the lights were on but nobody was home—it turns out that that applies just to their policy on child poverty rather than to them as individuals. The Conservatives would do well to remember that these figures are not merely statistics; they tell a story of lost opportunity, of lost moments of childhood, and of lost potential not just for the affected children but for our local economies.
Gareth Snell
My hon. Friend’s point about lost moments of childhood is often missed. It is all well and good to talk about the impact on parents and on the economy, but having grown up in poverty, I remember walking to school with a hole in my shoe, and not being able to ask my grandparents for anything because they could not afford it. I remember feigning not wanting to go on school trips because I knew that they could not afford it. I remember making sure that the holes in my jumper were hidden when I got home because I knew that they could not afford to replace it. Those memories stick with people throughout their lives and continue to have an effect on them once they have grown up. This is not just about the economics of the here and now; it is about the real-life impact on young people today and in the future. I thank my hon. Friend for ensuring that those voices are heard.
Andrew Pakes
I entirely endorse my hon. Friend’s comments. It sounds as if we may have had similar childhoods, only in different parts of the country.
The statistics cited in this debate do not sit in isolation. It is no coincidence that, alongside high levels of child poverty, Peterborough also has some of the highest levels of low-paid and insecure work in the country. At the last count, and going by the Government’s definition, one in three working people in Peterborough are in chronically insecure work—largely zero-hours shift work, which the Conservative party voted to keep in our economy, while we voted to eradicate it. Peterborough has one of the highest numbers of adults with no qualifications. Despite our city’s wonderful industrial heritage, nothing says more about the wasted opportunities of the last 14 years than the 70% drop in level 2 and level 3 apprenticeships in Peterborough—that comes at a cost to the country.
Although I have painted a picture of the difficulties that many families face in my city, I pay tribute to the incredible ingenuity, determination and grit that parents demonstrate—often in difficult times and despite the adversity that they face—to do their best, look after their children, raise ambition and give people jobs and opportunities. We were sent here to serve them, and we will help them by voting for the Bill.
To be honest, the Conservatives have some brass neck to talk about poverty, as do our colleagues and friends in Reform UK. At one point, I thought that they were plastic Tories, but now that the transfer window has closed, I just think that they are Tories. I represent a wonderful, brilliant and diverse city, so the naked racism in the Reform amendment, which talks about denying support for hard-working families based on the birthplace of the parents, is an affront to democracy and to British values.
Lee Anderson (Ashfield) (Reform)
The hon. Gentleman is being very generous with his time. Does he not agree with us that British people should be put first?
Andrew Pakes
I think that my community is full of wonderful British people—people who stand up for British values, and who go out every single day and work to do the best for their children and community. If you want to have a fight based on British values, bring it on, because every day Labour Members will defend—
Madam Deputy Speaker (Caroline Nokes)
Order. I respectfully remind the hon. Gentleman not to use the word “you”. He was suggesting that he might like to have a fight with me, and that would not end well.
Andrew Pakes
I apologise, Madam Deputy Speaker. I am wearing a deep heat patch for my bad back, so there would be no fight from me today. I apologise to the House for the passion I have for British values and the hard work of people in my community, who I will stand up for every day against the plastic patriots and others who seek to attack them.
Andrew Pakes
I will try to make some progress.
We have inherited an economic and moral failure by the previous Government, and this Bill will start to put that right by injecting money into the pockets of families and supporting children. It is also why I welcome the youth guarantee and the focus on earning and learning for this Government. The DWP has described Peterborough as a national youth unemployment hotspot, and it is a national hotspot for child poverty, too. Through the work of this Government to address the needs of children in poverty—the expansion of family hubs, the support for breakfast clubs, the investment in schools and early years alongside the investment in further education and apprenticeships—we are beginning to turn the tide.
What matters to the people of my constituency is having the chance to get on in life, to support their children and to have pride in their community and their families. Today, with this Bill, which I hope all Members will vote for, we begin to restore pride in our community by giving dignity back to parents in difficult situations.
Antonia Bance (Tipton and Wednesbury) (Lab)
I stand here as a proud representative of the Black Country and the trade union movement. Black Country people work hard. We are proud and we are resilient, but 50 years of deindustrialisation and 14 years of Tory austerity mean that wages are low, poverty is high, unemployment is high, economic inactivity is high, and many families have to rely on universal credit to make sure there is enough money to get to the end of the month. I resent the implication that areas like mine, where universal credit payments are high, are somehow “Benefits Street”.
Antonia Bance
I will get to the right hon. Member.
It was the Conservative party that changed the benefits system to give us one benefit for all circumstances, in and out of work. For the Conservatives to now attempt to invent a deserving and undeserving poor dichotomy, when they made that change to one unified system—which was the correct one—is a little bit galling.
Graham Stuart
The hon. Lady is, as ever, showing a powerful oratorical style, but it is so easy when doing that to get one’s facts wrong. Unemployment, I am sure she will recognise, was at a near record low when the Conservatives left office and has risen by more than 20% in the less than two years that Labour has run the country. I know the hon. Lady is careful with the facts and will want to retract the point about unemployment under the Conservatives. Whatever other ills she wants to attribute to us, I do not think she can genuinely attribute that.
Antonia Bance
The right hon. Member will note that I was making a point about the comparative rates in different areas of the country, including my own, and the impacts of deindustrialisation over the last 50 years, rather than about national rates.
On the Labour Benches, we deal with the world as it is—human lives in all their messy complexity—because everyone is deserving of dignity, opportunity and hope, and every child deserves a decent start. That is why I am so proud today to say this: if you get ill or lose your job, if—heaven forbid—your partner dies, or if your husband beats you up and you have to grab your kids and run, the safety net of our welfare state will once again catch you and every single one of your kids.
Since the day I came to this place and long before, I have argued for this change—I have argued that no child is responsible for the actions of their parents, that the happy event of a little one being born should not tip a family into poverty, and that whether a six-year-old eats tonight should not depend on how many sisters or brothers they have. This day has come because we have a Labour Government, and for that reason alone. I invite everyone sitting on the Opposition Benches who thinks they had something to do with this day to retract their comments and remember who those children have to thank.
Ending the two-child limit helps 5,540 children in Tipton, Wednesbury and Coseley. Whenever I go on a school visit in my area—where child poverty levels are at 50%, but not for long—I say to that assembly, to those children, “If you have more than two sisters or brothers, please raise your hand.” And I look and the teachers look at the forest of raised hands of children in larger families, and we know what that means. It means that in April, those families will open their universal credit journal or their banking app, and they will see an amount of money that is adequate to meet their family’s needs—not luxury, not extras, but adequate at last.
Some 1.6 million children nationally will be helped by the policy that we will pass tonight—one kid in every nine of our kids helped. Most of the families that will be helped—six in 10 of them—are in work. Loads of them—four in 10—have a disabled family member. Some of those families have kids so young that the parents cannot work. Not a single one of them deserves to live in poverty.
To the mums with three or more kids, using universal credit to top up low wages and high rents: this is for you. Know that far away in Westminster, a bunch of people you elected to stand up for hard-working, low-income families thought of you and your kids, and took out a gross, punitive law that kept you and your kids poor.
Dr Luke Evans
The hon. Lady talks about speaking for the public, but consistently, in all polling, 60% of Brits want to see this policy stay in place. What does she say to them?
Antonia Bance
I say to the people in my constituency and elsewhere who have raised questions with me about this policy that in order to will the ends, you have to will the means. Save the Children published this morning some polling showing that 78% of the country want to see child poverty cut. The fastest and most effective way to cut child poverty is to get rid of this punitive, gross policy that artificially inflates the number of children in poverty and creates an escalator to get more into poverty every day, with every child born.
To the Opposition parties, I would say this. I hear you say to these families, “Go out and get a job.” Most of them are already in work. Are you telling those five and six-year-olds—
Madam Deputy Speaker (Caroline Nokes)
Order. Not “you”—I have not spoken in this debate!
Antonia Bance
Thank you very much, Madam Deputy Speaker.
I say to those on the Opposition Benches who are telling people already in work to go out and get a job: what are those people supposed to do? Are they supposed to send their five-year-olds out on a paper round to make the money add up when it does not? Do not talk to me about how families should plan better—you will never meet a better planner than a single mum in Princes End making the money stretch. Do not cry crocodile tears for kids whose dad died but when his widow needed help, we said, “Nah. You shouldn’t have had so many kids.” Do not tell me that a dad who lost his job does not deserve help for his kids because he did not predict years in advance, when planning his family, that his factory would close and he would be dumped out of work. Be honest about what supporting the two-child limit means. If you support it, you think that some kids should be hungry tonight—well, we don’t.
I have no words for the idea of the charlatans of the Reform party, who would reimpose the two-child limit, plunge thousands of children into poverty and take hundreds of pounds from families each month in order to make it cheaper to have a pint. The hon. Member for Runcorn and Helsby (Sarah Pochin) was too frit to give way to me, so I will say this to her this now. Her policy would affect Sikh children living in my constituency who have a mum or dad born in the Punjab, or children in my constituency with a mum or dad who was born in Bangladesh, Poland or Pakistan. These are British people. They are our neighbours and our friends—people who work and play by the rules. They are British citizens, but they are second-class citizens for Reform.
I was glad to see that the right hon. Member for North West Hampshire (Kit Malthouse) called out Reform. I would like to see more calling out of that frankly disgusting point of view: the differentiation between different types of British citizen based on nationality and the colour of their skin that we see going on in our national political dialogue and in the Reform party. I hope that people across the country, in Scotland, in Wales and in my borough of Sandwell, will reject that division when the time comes in May—and that those in Gorton and Denton will do so as well.
I say this to my constituents who are working hard to make ends meet: I will not apologise for prioritising our kids. Every child deserves a fair start in life. As one of our greatest Prime Ministers said when launching his own child poverty mission:
“Poverty should not be a birthright. Being poor should not be a life sentence”.
We want every child to have the freedom to learn, to play sport, to sing, to dance and to get on in life, free from want and fear—the freedom to be kids. This is what a Labour Government will deliver: half a million of children out of poverty. I will be voting for the Bill tonight, and I hope other Members will too.
Rebecca Smith (South West Devon) (Con)
I will start by repeating something that the Secretary of State said at the start of the debate. He made much of the need to set against anger and division, so I am going to appeal to everyone’s better nature. Ultimately, the removal of the two-child limit was not in the Labour party’s manifesto, so until recently it was not something to which the Government had committed—in fact, it was ruled out by the Chancellor. I have sat through the entire debate and I have to say that it is a bit rich of Government Members to lecture us today, when in 2024 the limit was clearly good enough for the Labour party, including the current Prime Minister and the Chancellor. It is also worth pointing out that we keep hearing the figures 4.5 million and half a million. It seems that the removal of the two-child limit will reduce the 4.5 million people who the Government say are in poverty by just half a million. It will be interesting to hear the Minister comment on that.
The debate has been caricatured as being rich Conservatives versus everyone else, but nothing could be further from the truth. We believe in a safety net, but we also believe in personal responsibility. Many of us on the Opposition Benches grew up on benefits. I am one of those people, and I was in fact worse off when the Labour Government came into power in 1997; they scrapped the child benefit and replaced it with working tax credit, and my mum supported by dad’s business and did not go to work in her own right while she raised her four children. When I am asked why I am a Conservative, that is what I say—and I have checked that this afternoon to ensure that I am factually accurate. We are speaking up for those who work hard and have high bills, as well as housing and food costs, but who are paying tax because they do not qualify for universal credit.
I want to make one final point before I come to the body of my speech. Lots has been said about free school meals this afternoon, but when I recently questioned the Department for Education on whether it has any record of the number of councils making the most of the auto-enrolment for free school meals, I was told that the Government do not have the figure. They might wish to go away and look at that. I absolutely appreciate that auto-enrolment helps the most vulnerable, but if the Government are not taking account of the levers in their hands to improve that system, then they need to do some work.
Having done my bit of ad-libbing, I will make some progress with my speech. Fundamentally, maintaining the two-child limit is about fairness—fairness to working parents who do the right thing, fairness to working parents who make difficult choices and fairness for families who live within their means.
Rebecca Smith
No, I am going to make some progress.
We are talking about men and women who are working long hours in shops, schools, offices, construction sites and care homes right across the country. Why should families in receipt of universal credit have to avoid the difficult decisions about how many children they can afford, unlike those who are not in receipt of it?
Compassion is often framed in terms of supporting the most vulnerable, and rightly so—indeed, I have highlighted my own personal conviction on this in previous debates—but as one a colleague in my previous council career told me, “The left has no monopoly on compassion, Rebecca.”
Compassion cuts both ways. We must remember the millions of hard-working families across the UK who are not on large salaries yet fall outside any thresholds for universal credit—the families who earn the same for going to work as their neighbours do on universal credit. It is unfair to these parents to make them bear a double cost: raising their own children and subsidising other people’s.
Several hon. Members rose—
Rebecca Smith
No, I will not give way; I am going to make some progress.
These mums and dads are the backbone of our economy, and we cannot afford to let them down. Scrapping the cap reduces incentives for parents to look for a job or work longer hours. Why would they bother going to work, or working more, when they could get more in benefits? A strong economy must provide incentive structures that help people to do the right thing, and we tamper with these fundamental structures at our own peril.
Gareth Snell
On the point of doing the right thing, the data suggests that in the shadow Minister’s own constituency there are 1,160 children living in a household that does not currently receive universal credit support for the additional children. Some of them will be listening this evening, and some will be teenagers. What would she say to them? Would she tell them that she could do something this evening, but she is choosing not to? What is her justification to those children?
Rebecca Smith
I also speak for the 60% of the population who do not think we should be scrapping the cap. No doubt a large proportion of those people are also in my constituency.
As Conservatives, we believe in personal responsibility and living within our means. Our welfare system should be a safety net for the most vulnerable, not a lifestyle choice, as my hon. Friend the Member for Faversham and Mid Kent (Helen Whately) has argued so powerfully. As I have alluded to, it seems that we are not alone; that principle of fairness is echoed across the country, with a recent YouGov poll finding that 57% of respondents believe that the cap should be retained.
The situation is particularly stark for self-employed mothers, who can only access statutory maternity allowance —a flat rate that falls far below what their peers can receive via their employer. I recently met one self-employed mother who told me that she is seriously weighing up whether to have a second child because she and her husband simply cannot afford it right now. This is a deeply personal dilemma, fraught with conflicting emotions. Equally, those not on benefits who have more children do not get paid more wages—they just have to absorb the extra costs within their budgets—so this idea that we need to give people more money because they have more children does not always make sense. However, this Government are determined to give families on universal credit a free pass; as a result, those families will not have to make those kinds of hard choices.
According to the Institute for Fiscal Studies, for 70% of the poorest households currently subject to the two-child limit, any money they stand to gain from the scrapping of the limit will get partially or fully wiped out by the household benefit cap. How do the Government square that circle when they have been quoting the headline figures for poverty? As has been raised numerous times today by Opposition Members, if Labour truly followed its own logic on child poverty, it would also need to scrap the household benefit cap, at even greater cost to the taxpayer.
Conversely, 40% of those affected by the two-child limit will be exempt from the overall household benefit cap, because they have at least one claimant or child receiving health and disability benefits. This means that households with six children will get an additional £14,000 every single year. For larger families in particular, the financial gap between going to work and being out of work will shrink significantly. We are trapping good people in a bad system. Shockingly, one in four full-time workers would be better off on benefits than in work—that is 6 million workers across the UK whose neighbours on combined benefits are receiving more income than they are. It is no wonder that every day 5,000 people sign on to long-term sickness benefits. According to the Centre for Social Justice, a claimant who is receiving universal credit for ill health plus the average housing element and personal independence payment could receive the equivalent of a pre-tax salary of £30,100, and a family with three children receiving full benefits could get the equivalent of £71,000 pre-tax. How is this fairness?
At best, scrapping the cap is a sticking plaster that does not tackle the root causes of poverty. We know that work is the best route out of poverty—in fact, if this Government hit their ambitious target of increasing employment rates by 80%, that could lift approximately the same number of children out of poverty as scrapping the two-child limit. Instead, this Bill will be yet another strain on our ballooning benefits budget. If it had been retained, the two-child limit would have saved the taxpayer £2.4 billion in 2026-27, rising to £3.2 billion in 2030-31. Instead, the bill is being passed on to all those families I have spoken about already.
Rebecca Smith
No, because I believe the hon. Gentleman’s Minister will want to have a fair share of time as well.
When it comes to reforming welfare spending, the Prime Minister has shown extraordinary weakness of resolve. Scrapping the two-child cap is simply a political decision to placate his Back Benchers, costing taxpayers billions. It is unaffordable for a welfare system that is already on its knees, and damaging to the very work incentives his party promotes. Indeed, no one voted for it at the general election. As the Leader of the Opposition has said,
“28 million people in Britain are now working to pay the wages and benefits of 28 million others. The rider is as big as the horse.”
Let us look at this through the eyes of hard-working parents and individuals. Many of their businesses and workplaces are already being hit by Labour’s damaging tax rises. These are people with a work ethic—they willingly shoulder the burden of supporting their families without relying on the state—but their commitment to doing the right thing is being thrown back in their face. The Conservatives are the only party truly standing by hard-working families. We are the only party serious about bringing the welfare bill under control and protecting taxpayers from yet more unavoidable costs. Keeping the cap is about fairness, responsibility and respect for the sacrifices that parents make every single day. To scrap it flies in the face of that.
The Minister for Social Security and Disability (Sir Stephen Timms)
Like the shadow Minister, I will start by quoting my right hon. Friend the Secretary of State for Work and Pensions. At the start of the debate, he said that this Government have chosen to reject the politics of division and of rage. Instead, we have chosen to seek to bring the country together and to open up a hopeful way forward. That is the choice that underpins this Bill.
It was my great privilege to take through this House the Child Poverty Act 2010, which was referred to by my hon. Friend the Member for Calder Valley (Josh Fenton-Glynn). That Bill, as he pointed out, had all-party support. George Osborne spoke in favour of it. A few months later, George Osborne was the Chancellor of the Exchequer, and the Government took the opposite stance. The four separate child poverty targets were scrapped. The headline rate of benefits was over time cut to the lowest real-terms level for 40 years. The Child Poverty Commission set up by the Act was replaced by the Social Mobility Commission, and child poverty eventually rocketed by 900,000 to 4.5 million. That is what Tory policies did. Their claim of wanting to tackle child poverty proved to be hollow, and we discovered the authentic voice of the Tory party, which we have heard again this afternoon.
We should not forget the contribution of the Tories’ coalition partners in the 2010 to 2015 Government. I warmly welcome the Lib Dem support that we have heard today. The hon. Member for Torbay (Steve Darling) made a thoughtful speech on behalf of his party, and we also heard from the hon. Members for Ely and East Cambridgeshire (Charlotte Cane), for Stratford-on-Avon (Manuela Perteghella), for Eastleigh (Liz Jarvis) and for Mid Dunbartonshire (Susan Murray). Their party leader was in the Cabinet when much of the damage was done, and he did nothing to stop it when it came to the crunch. In the battle against child poverty, the Lib Dems were nowhere to be seen.
Sir Stephen Timms
I will not just at the moment. Poverty does immense harm, as we have heard, to children and their future prospects. In the classroom, children eligible for free school meals are on the wrong end of an education gap that reaches 19 months by age 16. They earn around 25% less at age 30. Recent research by Liverpool University has shown that children growing up below the poverty line are three times more likely to be not in education, employment or training as young adults. To tackle the NEET problem—as we must, with almost a million young people left NEET by the last Government—we have to tackle child poverty, too.
We have heard arguments in this debate that we are piling up costs for the future. Actually, it is the failures of the past that have piled up those costs, and we are now having to address that. The costs of child poverty play out throughout the lives of those affected. They play out in our social security system, in the NHS and in other public services, too. The Tories claim that by making those cuts, they were saving money. What they were doing, in fact, was heaping up massive costs of future failure, which we are all now having to pick up.
The Bill will deliver a better future for our children and for the country. Removing the two-child limit in universal credit will lift 450,000 children out of poverty by the end of this decade, and that figure rises to more than half a million children alongside other measures in our child poverty strategy. That is a generation less likely to struggle with their mental health, more likely to do well at school and more likely to be in work as young adults and to thrive in their future working lives. That is a generation with the capacity to thrive. That is the future we are choosing to build.
Siân Berry
The Government narrowed the scope of the last benefits Bill, and it could widen this Bill to take in the wider benefit cap, too. The Chancellor who could find the money for that is right next to the Minister. Can the Minister explain why, despite the interest in lifting the overall benefit cap in the Chamber today, according to the impact assessment the only options assessed were doing nothing or this very narrow measure?
Sir Stephen Timms
The change for which I think the hon. Lady is arguing would make a relatively modest alteration to the figures. There is a real advantage in the benefit cap, in terms of the incentive to work. We are not proposing to change that, and in the changes that we are making we are maintaining that incentive very robustly. This is a change from the choices of the last Government, which left us with a third of primary schools running food banks.
I echo the tribute paid by my hon. Friend the Member for Liverpool Riverside (Kim Johnson) to the work of the End Child Poverty Coalition. Members including my hon. Friend the Member for St Helens North (David Baines) rightly referred to the Child Poverty Action Group, and others mentioned the Joseph Rowntree Foundation. I pay tribute to all those who have campaigned, successfully, for the change that we are making.
The shadow Secretary of State, the hon. Member for Faversham and Mid Kent (Helen Whately), said in her opening speech that her party did not accept the relative poverty definition. As we were reminded during the debate, her party embraced that definition in 2010—it was part of the change that was made at the time—but between 2010-11 and 2023-24, even absolute poverty rose. It was higher at the end of that period than it had been at the beginning. That was an extraordinary feature of her party’s record in government.
I am grateful to my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) for her contribution to the debate and for the work of her Work and Pensions Committee, alongside that of the Education Committee, chaired by my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes), in scrutinising our child poverty strategy. The points that she made were absolutely right.
My hon. Friend the Member for Lewisham East (Janet Daby) was, I think, the first to draw attention to the struggle that teachers are having in supporting children in classes. According to survey evidence, in 38% of schools staff are currently paying out of their own pockets to provide essentials for their pupils because their parents cannot afford to buy them. They have full-time roles tackling hardship, taking away funds that ought to be spent on education.
The hon. Member for Hinckley and Bosworth (Dr Evans) made a thoughtful speech, as he often does, but he was wrong. He said that the extra money would be for people because they were not working. It was pointed out by my hon. Friend the Member for West Dunbartonshire (Douglas McAllister), my hon. Friend the Member for Corby and East Northamptonshire (Lee Barron)—in a spirited contribution—and my hon. Friends the Members for Ipswich (Jack Abbott), for Isle of Wight West (Mr Quigley), for Southampton Itchen (Darren Paffey), for South Derbyshire (Samantha Niblett), for Nottingham East (Nadia Whittome), for Bishop Auckland (Sam Rushworth) and for Peterborough (Andrew Pakes) that the great majority of the beneficiaries of this measure are people in work, and as a result the hon. Gentleman’s argument crumbled away.
Sir Stephen Timms
No, I will not be giving way.
It was very interesting to hear the arguments of the hon. Member for Runcorn and Helsby (Sarah Pochin). Her party is looking more and more like a cut-price Boris Johnson reunion party, with all the old faces turning up on the Reform Benches. Now they are even starting to sing some of the old songs. The leader of their party has been talking for years about opposing the two-child limit, and just a few weeks ago, the right hon. and learned Member for Fareham and Waterlooville (Suella Braverman) wrote an article in which she said that she opposed it. Today they are voting with the Tories in favour of the cap. Those old policies would cause the same damage if they were brought in again in the future.
I remember a time when there seemed to be at least some degree of consensus in the House on the importance of tackling child poverty. Well, there was not much sign of that among Conservative Members this afternoon, and I am sorry that we have lost it. Scrapping the two-child limit on universal credit is the single most effective lever that we can pull to reduce the number of children growing up poor, and in pulling that lever we are helping hundreds of thousands of children to live better lives now, and to have real grounds for hope for their futures. We are supporting their families, the majority of whom are working families, and by enabling the next generation to fulfil its potential we are investing in our country’s success in the years to come.
The Bill is the key to delivering the biggest fall in child poverty in any Parliament on record, and in doing so it will make a very big contribution to the missions of this Government. Our manifesto was summed up in one word—“change”—and this is what change looks like: ambition for families, and for the country.
Question put, That the Bill be now read a Second time.
The House proceeded to a Division.
Madam Deputy Speaker (Caroline Nokes)
Will the Serjeant at Arms investigate the delay in the Aye Lobby?
Universal Credit (Removal of Two Child Limit) Bill
Monday 23rd February 2026
(3 weeks ago)
Commons ChamberRead Full debate Universal Credit (Removal of Two Child Limit) Bill 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 23 February 2026 - large print - (23 Feb 2026)
22:21 - divided: - Ayes: 73 / Noes: 286 - Question accordingly negatived.
22:46 - The House divided: - Ayes: 361 / Noes: 84 - Question accordingly agreed to.
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
With this it will be convenient to discuss the following:
Clauses 2 and 3 stand part.
New clause 1—Removal of two child limit: report on effects on children in households subject to the benefit cap—
“(1) The Secretary of State must, within six months of the passing of this Act, lay before Parliament an impact assessment of the effects of this Act on households and children.
(2) The assessment under subsection (1) must include an estimate of the total number of households, and the number of households in poverty, which will not receive—
(a) an overall increase in benefit support from the abolition of the two child limit from April 2026 due to being subject to the overall benefit cap, and
(b) the full potential increase in benefit support they would have been entitled to from the abolition of the two child limit from April 2026, but for the fact that they became subject to the overall benefit cap following any increase provided through the abolition of the two child limit, and the assessment must include the total number of children in such households, and the impact on the number of such households in poverty.
(3) The estimates made under subsection (2) must include analysis at the following levels—
(a) country,
(b) county,
(c) local authority, and
(d) parliamentary constituency.”
This new clause would require the Secretary of State to undertake an assessment of the effects of the Act on households and children, including the number who will either not receive an increase in benefit support, or the full potential increase, because they are subject to the benefit cap.
New clause 2—Report on the effects on households with a disabled family member—
“(1) The Secretary of State must, within 12 months of the passing of this Act, lay before Parliament an impact assessment of the effects of this Act on the number of households in poverty with more than two children that have at least one disabled family member.
(2) The assessment under subsection (1) must also consider—
(a) the cumulative impact of changes to universal credit since July 2024 on households in poverty that have at least one disabled family member, and who are affected by this Act, and
(b) any changes in the standard of living for households with—
(i) three or more children, and
(ii) at least one person in receipt of the Universal Credit health element, arising from implementation of this Act.”
This new clause would require the Secretary of State to publish an impact assessment of the effects of the Act on households in poverty that have at least one disabled family member.
New clause 3—Review of the impact of the Act on child poverty, destitution, and wider social and economic outcomes—
“(1) The Secretary of State must, within 12 months of this Act coming into force, review the effect of this Act on—
(a) overall levels of child poverty in the UK;
(b) levels of destitution and deep poverty among households with children;
(c) households in receipt of Universal Credit which include children;
(d) educational outcomes for children in households affected by poverty;
(e) physical and mental health outcomes for children in households affected by poverty; and
(f) longer-term impacts on economic participation, workforce skills, and demand on health and welfare services arising from child poverty and destitution.
(2) The Secretary of State must lay before Parliament a report setting out the conclusions of the review.”
This new clause would require the Secretary of State to undertake a review of the effects of the Act on child poverty, destitution, and wider social and economic outcomes.
New clause 4—Assessment of the impact of the Act on child poverty—
“(1) The Secretary of State must, within 6 months of the passing of this Act, undertake an assessment of the effects of this Act on children and child poverty.
(2) The assessment under subsection (1) must consider households with three or more children which are subject to, or as a result of this Act become subject to, the benefit cap.
(3) The assessment must estimate the annual cost to the Exchequer of—
(a) implementation of this Act, and
(b) implementation of this Act if households were not subject to the benefits cap.
(4) The Secretary of State must consult the following organisations in undertaking the assessment—
(a) Child Poverty Action Group,
(b) End Child Poverty Coalition,
(c) Save the Children UK,
(d) The Children’s Society,
(e) Barnado’s UK,
(f) Action for Children,
(g) Joseph Rowntree Foundation, and
(h) any other organisation that he deems appropriate.
(5) The Secretary of State must lay before both Houses of Parliament a copy of the assessment.”
This new clause would require the Secretary of State to undertake an assessment of the effects of this Act on children and child poverty in consultation with a number of relevant specialist organisations and also assess the cost of removing the cap.
The Minister for Social Security and Disability (Sir Stephen Timms)
It is a privilege to bring this Bill back before the House. This Government believe that everybody should have opportunity in life: opportunity to achieve their potential and their ambitions, whatever their background. However, at the moment too many children are held back by the scourge of poverty, which affects their wellbeing, how well they do at school and their prospects in their adult working lives as well. No child should have to face lifelong consequences like those, and neither should the country have to bear the huge cost of so much wasted talent and potential.
Lifting the two-child limit in universal credit is the single most cost effective lever that we can pull to reduce substantially the number of children growing up in poverty. In doing so, we are helping hundreds of thousands of children to live better lives, supporting their families and investing in their future success. It is this Government’s mission to break down barriers to opportunity, to change the course of children’s lives for the better and to build a more hopeful future. The Bill makes a big contribution, delivering more security, more opportunity and more respect for families and communities across the UK.
Clause 1 removes the universal credit two-child limit in Great Britain from April this year. By doing so, we will lift 450,000 children out of poverty. That means that for assessment periods starting on or after 6 April, the universal credit child element will be included for all children in the household, increasing the amount of social security support available to families on universal credit with three or more children. All the associated exceptions will be removed at the same time, including the notorious rape clause.
Kirsty Blackman (Aberdeen North) (SNP)
Specifically on that point, does the Department have good enough data on subsequent children? Have people provided the information that the Department needs to ensure that the extra payments can be made timeously?
Sir Stephen Timms
We are confident that we can do that from April onwards. Reinstating support for all children in universal credit is a key step to tackling the structural drivers of child poverty. This Bill, combined with other measures in our child poverty strategy, will lift over half a million children out of poverty.
Clause 2 removes the two-child limit from universal credit in Northern Ireland from April. We are including Northern Ireland in the Bill at the request of the Northern Ireland Executive, who are bringing forward a legislative consent motion in the usual way. I am delighted to see the hon. Member for Strangford (Jim Shannon) in his place. On Second Reading, he made the point that 50,000 children in Northern Ireland will be lifted out of child poverty. He rightly said:
“If anyone is against that, there is something wrong with them.”—[Official Report, 3 February 2026; Vol. 780, c. 168.]
I agree with him on that point and I am grateful to him for making it.
Jim Shannon (Strangford) (DUP)
I very much welcome what the Government are bringing forward. It is good news and, as the Minister says, if anyone is against that, there is certainly something wrong with them. I cannot see how the measure will not be welcomed. The fertility rate in Northern Ireland is 1.71 children per woman, but for the population level to be stable it needs to be 2.1 children per woman. Does the right hon. Gentleman think that the measures in the Bill will encourage more people to have children? If they do, then that is good news as well.
Sir Stephen Timms
I am not sure what the effect will be. It is often said that a Labour Government has the effect of increasing the birth rate, but whether that will prove to be the case this time, I do not know.
Child poverty is a big challenge. Reducing it over the next 10 years will require commitment and collaboration across all four nations. The strategy, including removing the two-child limit, builds on plans under way across Government and devolved Governments. We will continue to collaborate with devolved Governments on the issue, particularly through the implementation phase that will now follow.
Clause 3 sets out the territorial extent of the Bill, the commencement dates for each of the sections, delegated powers and the short title of the Act.
The Government recognise the consequences of child poverty and the damage that it does to a child’s life chances. In the poorest 10% of areas, babies are twice as likely to die before they turn one as those in the wealthiest 10% of areas. Poorer children are more likely to have mental health difficulties by the age of 11, to be unemployed later and to earn less as adults. We estimate that the Bill will increase the universal credit award for 560,000 families, who will gain on average £5,310 per year. That is a much-needed change from the choices of the previous Government—they chose austerity, and children paid the price. Tackling child poverty is an investment in our economy and a downpayment on Britain’s future.
Rachael Maskell (York Central) (Lab/Co-op)
Before the House are four new clauses to the legislation. They set out a pathway through which we can generate data, particularly around the welfare cap, which we know holds back 141,000 children. In the assessments that the Government make, will the Minister draw out particularly the impact of the welfare cap on those children? Will he look to remove it to ensure that those children are not held back in poverty?
Sir Stephen Timms
I am sure that we will turn to the points that my hon. Friend makes in a few moments, but I reassure her that we will undertake a thorough evaluation of the impacts of the strategy. We will publish regular updates, and I think she will find there the information that she is interested in.
We cannot leave millions of children to succumb to the damaging impacts of poverty. The Government want instead to invest in children and in Britain’s future.
Rebecca Smith (South West Devon) (Con)
I will speak in part to amendments 1 and 2, although we will not vote on them this evening. Essentially, I am speaking because we do not believe that scrapping the two-child limit and lifting it in this way is the way to tackle child poverty.
When the Conservatives introduced the two-child limit in 2017, we did so for one simple reason: fairness. We believed then, as we do now, that people on benefits should face the same financial choices about having children as those supporting themselves solely through work. Nine years later, we stand by that principle.
The welfare state should be a safety net for people in genuine need, yet too many people feel that the welfare system has drifted from its original purpose. They see a system that rewards dependency while working families and individuals shoulder the tax burden. The two-child limit is a way of saying that work should pay, that taking responsibility should matter and that the system should stand with those who pull their weight.
Josh Fenton-Glynn (Calder Valley) (Lab)
I am excited to hear that the hon. Member thinks work should pay. Can she tell us why, under the last Government, we went from one in three children in poverty having a parent in work to two in three children in poverty having a parent in work?
Rebecca Smith
We know that poverty decreased under the last Government; I will make some progress.
True compassion for families in poverty means offering sustainable solutions, not just sticking plasters. We need to tackle the root causes of poverty, rather than masking the symptoms. That means dealing with structural issues that damage children’s life chances, rather than simply handing out more cash to families.
It is worth noting that the two-child limit has had no significant negative effects on school readiness for third and subsequent children in England. School readiness is the cornerstone metric of the Government’s opportunity mission. Labour and other opponents may criticise the cap for all sorts of reasons, but scrapping it will not be a cost-effective way of improving children’s educational development.
In terms of holistic solutions, we know that work is the single most transformative route out of poverty. Work provides stability, self-respect and the crucial stepping stones to a better future. We should be doing everything we can to ensure that families on universal credit can access meaningful employment. As I have said before, children in long-term workless households are four times more likely to be materially deprived, and they are 10% more likely to end up workless themselves.
When we were in government, Conservatives oversaw a consistent reduction in the number of children in workless households, yet under Labour that number has reached a nine-year high: there are now 1.2 million children living in homes where no parent has worked for over a year. Without a working parent at home, children miss out on seeing the rhythms and rewards of working life—the morning alarm, the daily routine, the pride of earning a wage and the discipline of saving up for things that matter. This Government seem bent on disincentivising work and destroying jobs.
Kirsty Blackman
Is the hon. Lady aware of what percentage of people currently subject to the two-child cap are in work? Is she aware that 22% of people on universal credit earn more money than the personal allowance and therefore pay income tax?
Rebecca Smith
I thank the hon. Lady for her intervention, which provides me with a great opportunity to say something that I realised again while preparing for this debate. We know that lots of working people claim universal credit, but what we do not know is how many hours those people work, which would enable us to ascertain how many of them are full-time workers and how many are part-time workers. Of course, if they are full-time workers, there is one argument to be made, but if—as I would assume—the vast majority are part-time workers, we need to be encouraging them to work more hours. Later in my speech, I am going to get to a point where this is a problem, given all the other passported benefits that they get once they are entitled to universal credit.
How can it be fair to expect working parents to subsidise other families’ decisions that lie beyond their own financial reach? We also must not forget the single people whose household overheads are higher than in dual-income households. In 2024, there were 8.4 million people living alone in the UK—nearly 30% of households. They, too, should not be saddled with the extra tax burden that scrapping the two-child limit will inevitably create.
This Labour Government prefer handouts to hard choices. Giving away cash will always be more popular than exercising fiscal responsibility—the Back Benchers like it, and the left-wing think-tanks like it. The families who will get thousands more pounds every year like it, and who can blame them? Spending other people’s money is an easy way for the Government to feel good about themselves, but that money must come from somewhere. This Government are only pretending that they can afford to scrap the cap; originally, they said that doing so was unaffordable. That is true—the cost of this policy will be about £3.5 billion—but instead of sticking to his guns, our Prime Minister has capitulated to his Back Benchers. It requires backbone to bring the welfare budget under control, and backbone is exactly what Labour lacks.
In contrast, previous Conservative Governments did indeed control spending; until the pandemic, spending on working-age welfare fell in real terms. That is why we have committed to save £23 billion. We will crack down on the abuse of Motability, we will stop handing out benefits to foreign nationals—because citizenship should mean something—and we will stop giving benefits to people with low-level mental health problems, to ensure that we can target support to the people who need it most.
Under Labour, the overall benefits bill continues to balloon. By the end of this decade, health and disability benefits alone are set to reach £100 billion—I did read that right. Scrapping the cap is fiscally irresponsible and Labour knows it. This Bill will only increase the tax burden on hard-working men and women whose household budgets are already being stretched to the limit.
Jim Shannon
I feel I have to disagree with the hon. Lady, for a very simple reason. The Minister has mentioned my comment on Second Reading that 50,000 children will be lifted out of poverty in Northern Ireland, and some 13,000 families will have a better standard of living. The mark of any society is that whenever those who are less well off need help, we must help them. That is why I think the Government are doing the right thing: they are helping to lift people out of poverty, and what is wrong with that?
Rebecca Smith
I thank the hon. Gentleman for his intervention. Of course how we care for the most vulnerable is the mark of our society, but as Conservatives we do not believe that it is simply about trying to lift them up by giving them extra cash. All we are doing is changing the relative poverty measure; we are not suddenly lifting all these people out of poverty because we are giving them more money. We do not know what they are going to spend that money on. What we need to do is spend the money not on sticking plasters, but on putting things in place that actually have a systemic impact. We need to bring people from long-term poverty into a long-term position in which they can afford what they need.
Inflation has soared to nearly twice as high a level as when this Government entered office. Food prices are rising. Utility bills are rising. Even the cost of relaxing at the pub with a beer is rising. We cannot lift children out of poverty by making the whole country poorer, as my hon. Friend the Member for Faversham and Mid Kent (Helen Whately) has argued so persuasively. When inflation rises, spending power falls. The money people earn buys less, because each pound is worth less than before; indeed, the money people receive on benefits is also worth less because of inflation. Families feel it at the checkout, at the petrol station and with every bill that drops through the door.
Inflation not only squeezes families’ budgets, but narrows their choices. With the cost of everyday essentials continuing to climb, many working families are being forced to delay or even abandon plans for another child. Scrapping the two-child cap gives families on benefits a choice that many working households can no longer dream of: the ability to grow their family without facing financial choices.
This unfairness erodes trust in our social contract. The social contract is an implicit agreement between citizens and the state that gives the state its legitimacy. People work and pay their taxes; in return, they trust the state to step in if they fall on hard times. They trust the state to spend their taxes responsibly on their behalf, but the welfare system has become totally lopsided. Over half the households in this country now receive more from the state than they pay into it. Taxpayers are supporting a system larger than themselves. Scrapping the two-child limit will further exacerbate the imbalance.
The problem does not stop there. There is an entire shadow system working alongside universal credit. As I have mentioned, passported benefits are costing the taxpayer £10 billion every single year. They include healthy food cards, discounted broadband and free prescriptions. Together, they distort work incentives, leading to a cliff-edge denial of entitlements when a claimant comes off universal credit. Many parents want to work, but are better off remaining on benefits once they factor in their loss of eligibility for those extra entitlements. Yet again, they have been let down by a system that should be supporting them into work, not trapping them on benefits.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Can the shadow Minister remind the Committee of the weekly rate for the standard UC allowance?
Rebecca Smith
I am not particularly well today, so the right hon. Lady will forgive me if my memory is foggier than normal. That is why I am wearing my glasses, and it is why I am struggling not to cough throughout this debate. I am happy to have a conversation with her afterwards, but testing me on those sorts of things at this particular time is perhaps not the kindest thing to do.
The two-child limit is about basic fairness to working parents—the very people whose taxes fund our welfare system. They are already making tough decisions about the size of their own families, and we cannot exempt people on benefits from those hard choices. Scrapping the cap is a direct insult to the working families on whom this country relies.
The Government should remember the case that they once made for keeping the cap. When the Prime Minister suspended seven of his own MPs in 2024 for voting to scrap it, he did so on the basis that the policy was simply too expensive. He has now bowed to pressure from his Back Benchers, but nothing has changed—it is still unaffordable. Why are this Government preparing to spend billions by removing the two-child limit, when they cannot even get a grip on rising unemployment? We should be expanding real routes into work, not deepening incentives to remain on benefits.
Rebecca Long Bailey (Salford) (Lab)
I speak in support of new clause 4, tabled by my right hon. Friend the Member for Hayes and Harlington (John McDonnell), me and others, and I will try to be as brief as I can. Scrapping the two-child limit in full remains the single most impactful step we can take to reduce child poverty, and will lift 450,000 children out of poverty by 2030. When combined with other measures in the child poverty strategy, more than 550,000 children will be lifted out of poverty by the end of the decade.
Some Members of this House have said, “How can the country justify this multibillion-pound spend?” It is around £3 billion a year, but child poverty costs the UK economy £39 billion annually—more than 10 times as much. That £39 billion reflects poorer health, lower educational attainment, increased pressure on public services and lost economic potential. Investing £3 billion to reduce a £39 billion problem is not reckless spending; it is a highly targeted, cost-effective investment with long-term returns. It is preventive policy at its very best.
Other Members have asked why taxpayers should support larger families. Well, the honest truth is that only a very small number of families have more than four children, and almost all are working hard to provide for them. The two-child limit has had no measurable impact on family planning and has not influenced fertility rates; it simply punishes children who are already here. Every child, regardless of birth order, deserves enough food, a safe home and a fair start in life. When children are supported to thrive, they do better in school, stay healthier and contribute more fully as adults, and that benefits all of us.
Those who argue that support should not go to families out of work should remember that six in 10 children affected by the two-child limit live in households where at least one parent works, and those families are taxpayers too. As my mum says, there but for the grace of God go I. A crisis can happen in an instant at any moment, and bereavement, illness, redundancy or family breakdown can push any household into temporary reliance on universal credit. A humane and flexible social security system exists to provide stability in those moments of crisis.
I urge all Members to support the passage of the Bill today, but it must be just the start and we must go further. Alongside scrapping the two-child limit, we have to address the wider benefit cap, which was introduced in 2013. It has bored down on the backs of many families like a rucksack full of lead. Organisations including the Child Poverty Action Group, the End Child Poverty Coalition, Save the Children UK, the Children’s Society, Barnardo’s, Action for Children and the Joseph Rowntree Foundation have all highlighted the damaging impact of the overall cap. It places arbitrary ceilings on support, regardless of rent levels, local costs or family size. It disproportionately affects single parents—overwhelmingly women—and families in high-cost areas. It drives rent arrears, temporary accommodation and homelessness, and the evidence is clear that it does not meaningfully increase employment; it increases hardship.
If we are serious about tackling structural poverty, we cannot remove one barrier while leaving another firmly in place. Lifting the overall benefit cap would complement the removal of the two-child limit, ensuring that the gains we make today are not clawed back through arbitrary ceilings that fail to reflect real living costs. I applaud the Government for scrapping the two-child cap, which is the right thing to do, but I hope that the Minister can give us some assurances that his next step will be to look at lifting the benefit cap.
Charlie Maynard (Witney) (LD)
It has been a very painful path to get to this point, but I simply want to welcome what the Government are bringing in. Reversing the decision on the two-child limit will lift 540,000 children out of absolute poverty, and it is unquestionably the right thing to do—certainly for those children and for their families, but also for our economy, our public services and our society as a whole. Children growing up in poverty face worse educational outcomes, poorer physical and mental health, and fewer opportunities in adulthood. As the hon. Member for Salford (Rebecca Long Bailey) pointed out, this has a huge economic cost on our society, and investing a relatively small amount now for great gains later is very sensible.
This change will be worth up to £5,000 per year for each of the more than 500 families in my constituency who have been impacted by the cap. I have had heartbreaking emails from and surgeries with constituents impacted by this cap, as I am sure we all have. They have had to skip meals to ensure their children do not go without, because each month their money simply does not stretch far enough. Our food banks help enormously, but relying on them is obviously not the solution.
Too many children and families have been trapped in poverty because of the previous decision to impose the cap and this Government’s stubborn decision to keep it until now. I wish this change had happened a year ago, which would have saved a lot of trouble and stress for families and children involved, as well as for a few Members in this Chamber. I commend the Labour MPs who lost the Whip for fighting to end this policy for their courage. I am sure that their voices and actions have played a large part in the Government now bringing forward this Bill.
However, the Bill is very narrow in scope, and we should recognise that it is only one step towards tackling child poverty. There is much more we need to do, as highlighted by new clause 3, tabled by my hon. Friend the Member for Torbay (Steve Darling). Ministers will no doubt have seen the report published by the Joseph Rowntree Foundation that, while welcoming the decision to lift the cap, warned that progress on tackling child poverty as a result of removing the two-child benefit cap is likely to stall after April—two months away—unless it is supported by further follow-up measures. The headline from that report was that the number of people living in very deep poverty is at the highest level in more than 30 years, based on 2023-24 figures.
The Government must now make it an absolute priority to address that, which is why we are calling on them to look at the much wider issues of overall levels of child poverty, destitution and deep poverty among households with children, as well as at educational outcomes and physical and mental health outcomes for children in households affected by poverty. They need to thoroughly assess those a year after the passage of this Bill and report back to the House on its impact.
Debbie Abrahams
Is the hon. Member aware of the tackling child poverty strategy and the inquiry by the Education Committee and Work and Pensions Committee looking at just that, as well as at the data the Education Secretary published before Christmas?
Charlie Maynard
Yes, I am. I congratulate the Chair and members of the Work and Pensions Committee on doing all that good work; many thanks to them.
Assessing the wider issues may encourage the Government to take steps beyond this welcome but narrow Bill to support children and their families who are struggling to get by from week to week. Those include auto-enrolment of all those eligible for free school meals, so that children are automatically considered eligible when their parents apply for relevant benefits or financial support, and giving people the ability to juggle caring responsibilities alongside work without falling into hardship by increasing the value of carer benefits, particularly for those on low incomes.
Rachael Maskell
There could be no greater cause for a Government than to lift children out of poverty, which is why I very much welcome the removal of the two-child limit. However, the Joseph Rowntree Foundation has reported that 141,000 children will not see the full benefit of the change and 50,000 children—the poorest of our children—will get no benefit whatsoever because of the benefit cap. We must therefore examine the impact of the benefit cap on these families and how it is holding those children back in poverty.
We must strain every sinew to address poverty, looking at issues such as the sanctions in the welfare system; the spare room subsidy, which the Government championed in the bedroom tax campaign; and many more. We know that the impact of growing up in poverty, especially on disabled children, results in a greater cost to the state than were their poverty and destitution to be addressed.
Poverty is a source of many adverse childhood experiences, causing multiple disadvantages to children and changing their life trajectories. My work looking into the intersection of child poverty and the 1,001 critical days shows the causal link. When I recently met with a director of midwifery and discussed poor maternal outcomes, she impressed on me how addressing the multiple indices for which poverty is at the root is the most significant step we could take.
Low birth rate, domestic violence, substance abuse and intergenerational disadvantage lead to setting a baby, a child and then an adult on to a negative trajectory. When it comes to lifting children out of poverty, we have to look at what is currently holding 4.5 million children in poverty—2 million in deep poverty and 1 million in destitution. The steps that the Government have made are to be celebrated, but there is much more to do.
Last week, I had the privilege of launching Kate Pickett’s new book “The Good Society”, so I have spent the last couple of weeks engrossed in statistics and research on the impact of poverty on our society, its causes and the solutions. If the Minister has not read it yet, I suggest he makes it his priority. I describe the book as a manifesto because I believe it echoes our values and provides the evidence base that the Minister needs regarding why holding children down in poverty is a moral ill, when the evidence says that removing the cap will save the Government substantially, and lead to better outcomes for those children in health, education and employment, in the justice system and in society.
The Government said that they were going to invest in a decade of renewal and so would reap the benefits within two terms of office were they to remove the benefit cap. The four new clauses before us call for an assessment, which the Government must be keen to make. If we do not, academics will drive out the data and present it to us.
Conservative Members are wrong on the evidence base. We need to look at the number of children who have been pushed into poverty over the last 14 years. Life expectancy in our developed country is now ranked 24th out of 38 in the OECD, and our infant mortality is now ranked at 29th. There is a causal link. Whether it is health outcomes, educational outcomes, the impact on families, or the justice system, the roots of the issues can be traced back to poverty in childhood. If we are serious about cutting the social security cost or the prison population cost to the Exchequer, our only path is to invest in ending child poverty and taking our ambition beyond that of the child poverty strategy launched by our Government.
The evidence from York, where we have introduced free school meals, is that lifting children out of poverty has significantly enhanced their health and education outcomes.
Rachael Maskell
I am going to continue.
Risks including exploitation can be addressed if we put the right security around a child, so we must move all children out of poverty. A strong correlation exists between children in the justice system and poverty, with over half of children in secure accommodation being eligible for free school meals.
The evidence set out in “The Good Society” is powerful regarding why we need to lift children out of poverty. While we are rightly grateful for the steps that have been made, we have more to do. We know that 30% of disabled people live in poverty, and the risk of deep poverty is 60% higher in families with a disabled person. It is right, therefore, that in new clause 2 we seek to find deeper evidence. One reason to look at the benefit cap is that in my constituency we have among the highest costs of living in the country. The cost of housing is holding back families, as they do not have the resources to pay for the basics for their children. That is why I have worked with Citizens Advice in York, and said that I would raise these issues with the Minister.
As Pickett and Wilkinson point out in “The Spirit Level”, inequality is the root of each strand of social disadvantage, with the UK second worst in the world. Successive works of academics leading to two reports by Sir Michael Marmot have shown the impact on health outcomes, and whether in education, justice, housing or welfare, or indeed having any agency at all, we have a social and moral imperative to end the inequalities that widened following the 2008 economic crash.
I call on the Minister to look specifically at the benefit cap and to move those children forward and lift them out of poverty. We know that if we can turn the tables on their life outcomes, that can make such a significant difference.
If we are serious about our society gaining from the economic and social advantage of ending child poverty, we must look further, with a minimum income guarantee as a next step. We must also seriously consider a universal basic income so that no child experiences the deep and pernicious poverty that this place has for far too long held them in, suppressing their life chances and causing such harm.
Several hon. Members rose—
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
Order. I remind Members to speak specifically to the amendments.
Siân Berry (Brighton Pavilion) (Green)
The Government should have brought this Bill forward as soon as they were elected 19 months ago, but they failed to do so. They could have listened to the families and children—with more than 200,000 children affected—enduring the overall benefit cap before making their final plans, but they failed to do so. Ministers still could have listened to the many hon. Members, including myself, who said on Second Reading that the policy was too narrow. They could have widened the scope of the Bill, but they failed to do so. The Bill is not wrong, but it fails to do right by far too many children.
I speak in support of new clause 1, which has wide cross-party support. It would mandate a full assessment within six months of the families left in poverty by the failure of the Government to tackle the overall benefit cap, showing its impact on each of our constituencies and the families we represent. We need to know who is left out from the help provided in this Bill, including those who are left in poverty.
We also need to know the wider impacts as the change takes hold. That includes the removal of exemptions, because this Government are seeking at the same time to remove people from the few qualifying benefits that exempt people from the cap, including disability benefits. This wider attack on benefit claimants threatens to make the gap in the Bill even worse.
Jeremy Corbyn (Islington North) (Ind)
Does the hon. Lady have any idea why the Government have left the overall benefit cap in place, knowing full well that it will lead to a massive anomaly with other children driven into poverty at the very time that we should be taking all children out of poverty?
Siân Berry
I thank the right hon. Gentleman sincerely for that intervention. When I raised this matter on Second Reading, Ministers gave answers that echoed, rather horribly, the prejudicial, stereotypical arguments that we heard moments ago from the Opposition spokesperson, the hon. Member for South West Devon (Rebecca Smith), implying that leaving the cap in place would incentivise people to work, when we know that it really only drives people into poverty.
We also have excellent proposals in new clauses 3 and 4, which have the same goal. I appreciate fully the request for consultation and the provision of cost estimates in new clause 4. New clause 3 is very helpful in looking at the impact of the Bill on families with disabled people and on mental health, which are all important considerations.
The debate on Second Reading and today, and the amendments, reflect a near consensus across many parties —excluding the Conservative party—that the Government are not going as far as they should. The fact is that the overall benefit cap is just as cruel and just as driven by prejudice and stereotype as the two-child limit, and the Conservatives should never have introduced it. Those affected include nearly 1,000 families in my constituency—a high proportion due to our excessive housing costs.
That is the point: whatever extreme examples those on the right wing of politics wave around, these families do not get to keep and enjoy the funding they get from social security; instead, it goes straight out again on the absolute basics. Sky-high rents are responsible for most of the higher living costs putting people on benefits, with the money they receive, often on top of hard-won low wages, going straight out and into the pockets of landlords.
This cap punishes the wrong people. Today I want a clear commitment from the Minister to set out how the Government will collect data, analyse it, and report back to this House very swiftly on the families that they are not helping with this Bill. Then I want a clear commitment for the Government to fill this huge gap in their child poverty strategy, which is something that many charities agree with. Some might call this a U-turn, but through another lens it can be seen as a very welcome last-minute equaliser. Real help and more support, not spin and delay, is what these children’s lives deserve.
John McDonnell (Hayes and Harlington) (Lab)
New clause 4, in my name and the names of many hon. Members, echoes new clauses 1 and 3. I take reference from points made by the hon. Member for Strangford (Jim Shannon); when we came together to discuss the two-child limit and this Bill, the House was filled largely with compassion, because we had the view that we just could not stand by and watch so many of our children living in poverty. That is why we welcome the Bill and have campaigned for it for so long.
We were building an element of consensus across a large part of the House, but the problem that we have, as has been pointed out by my hon. Friends the Members for Salford (Rebecca Long Bailey) and for York Central (Rachael Maskell) and the hon. Member for Brighton Pavilion (Siân Berry) is that a good Bill is being ruined—or damaged, anyway—by avoiding the issue of the overall benefit cap. As it is impossible for Back Benchers to move amendments that will incur Government expenditure, we could not move an amendment to abolish the overall cap, so through the amendments we have tabled we are simply saying to the Government, “Please acknowledge that the abolition of the two-child limit leaves a large number of our children in poverty.”
My hon. Friend the Member for York Central has said that 141,000 children are affected by the overall cap, but from the last estimate the figure is about 150,000, and there are 50,000 families who gain nothing as a result of the Bill, which is excellent but does not go far enough. Another 30,000 families only get some partial benefit. All these amendments say to the Government, “Because we cannot move an amendment tonight that will scrap the cap, at least consult on the implications of this Bill and those it leaves behind.”
New clause 4 lists a number of the organisations that we depend on for the analysis of poverty and the discussion of the implications. The amendments are not revolutionary; they are straightforward. They ask the Government to please tell us what their next steps are, because they must include the tackling of the overall cap. I welcome the reviews that are going on, but meanwhile time is ticking over. It took us a year to arrive at the final conclusion on the two-child limit, and there could be another year of all those children still living in poverty.
Debbie Abrahams
The response to my right hon. Friend will be that everything that is being asked for—the outcomes that he would like—are in the terms of reference and will be addressed within the Education Committee’s child poverty strategy inquiry.
John McDonnell
That is why I urge Ministers to act swiftly in response to that review. I believe that all logic will drive these reviews to recommend the elimination of the overall cap, once and for all. I hope we will get something from the Minister tonight—some form of words that acknowledges the seriousness and urgency of the issue. I hope the reviews will report swiftly, so that we can, almost consensually, get legislation on this issue though this House incredibly speedily.
I am sorry that the Opposition spokesperson, the hon. Member for South West Devon (Rebecca Smith), is not very well, and I hope that when she recovers, she will discover compassion, because that is not what we heard tonight. We need to understand the genesis of the overall cap and the two-child limit. It goes back to the financial crisis of 2008-09. Our financial sector operated like a casino. We came to a financial crisis, and when George Osborne became Chancellor in 2010, he decided that it was about not the deregulation of our financial sector but Government overspending—it never was—so he introduced a policy of austerity, which targeted the most vulnerable. He targeted—
John McDonnell
The claim that there was no money left was disproved time and again. The argument that the Tories put forward was that we were spending too much on tackling poverty, on paying teachers and on our health service, but the crisis was a result of speculation, due to deregulation under the Tories for over 30 years—
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
Order. The right hon. Gentleman is experienced enough to know that he has strayed some distance from the Bill.
John McDonnell
True, true, so I will bring this section of my remarks to a fairly rapid conclusion. What happened was that the Chancellor at that time—
The Second Deputy Chairman of Ways and Means
No, we are going to return to the amendments to the Bill.
John McDonnell
My amendment to the Bill would tackle the inequity that was introduced as a result of George Osborne’s policies, which targeted children and disabled people. That is what they did; that is what that was about. What the Conservatives have done today is what they did in 2013 when they introduced the policy. They thought, “How can we construct a moral argument for this?”, so they reverted to the 19th-century Poor Law and the argument of less eligibility. The idea behind the 19th-century Poor Law was that someone in need of support should never be raised to the level of decency of an ordinary labourer. This policy echoed the argument from the 19th century that we cannot allow people to be raised out of poverty; they must remain in poverty. That is what the Poor Law did, and that is what this policy did. It thrust hundreds of thousands of children into poverty and deep poverty.
Jeremy Corbyn
Was it not the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) who, on a visit to Glasgow, discovered that there was much poverty, and decided that it was all the fault of there being too many children? He decided to punish the children for being poor in order to teach the next generation a lesson. That moral nonsense belongs with Malthus, not with any logical, socially minded human being.
John McDonnell
The moral case for the Poor Law’s principle of less eligibility was disproven, because the result was to drive people—in particular, children—into poverty and real hardship. That is what the two-child limit did, and that is what the overall cap has done. All we are appealing to the Government to do in introducing this excellent piece of legislation, which will lift 450,000 children out of poverty, is not leave the 150,000 behind. Will they give us an indication that they have a plan to tackle that issue?
We were virtually united in compassion when this Bill was introduced, and we can be united in compassion once again in scrapping the overall cap, but there is a sense of urgency now. I do not want children in my constituency to continue to live in poverty in accommodation for the homeless, and in temporary accommodation. I do not want them to live in deep poverty, not be able to go on school trips with the other kids in their classroom, or not be able to afford new shoes, a new coat and all the rest of it. We have heard almost the same sort of speeches that were made in this place in the 19th century, the sort that are why the Labour party was founded. It was founded to represent working-class people, and we want to eradicate poverty from our society. As we pass this Bill into law, I urge the Minister to give us some indication of what the next Bill will look like. Surely it must ensure the abolition of the cap.
Katie Lam (Weald of Kent) (Con)
I will speak in support of amendments 1 and 2, tabled by my constituency neighbour, my hon. Friend the Member for Faversham and Mid Kent (Helen Whately). One of the most basic principles of any successful society is that those who work hard are able to reap the rewards, yet under this Government, millions of families are being squeezed by high tax rates, rising prices and increasing energy bills. They are not working any less hard, but many of them are ending up with less money at the end of the month, every month. That is less money to spend on day-to-day essentials, and less money to save for a house, a holiday, a birthday present or a school trip for their children.
Those are the real-life consequences of this Government’s decisions. Many of those families see their money taken by the Government and wasted, or spent on those who choose not to work. A recent study suggested that once the cap is lifted, a family with three children in which both parents work would need to earn £71,000 to match the income of a three-child family in which neither parent works. How can it be right that one couple can wake up early every day, go to work and perhaps even take extra hours at their job, and end up with the same amount of money as their neighbours who do not work at all? It is their money that will pay for those who do not work. The Prime Minister and the Chancellor know that, but they are choosing to lift the two-child cap anyway. That is a disgraceful way to treat millions of people across the country who are doing everything they are supposed to do and are being punished for it.
Brian Leishman (Alloa and Grangemouth) (Lab)
There are pockets of Grangemouth with the deepest poverty in Scotland. Tonight in Clackmannanshire, 29% of children will go to bed living in destitution. Hunger and hardship are becoming more common. That is why I support the new clause tabled by my right hon. Friend the Member for Hayes and Harlington (John McDonnell).
It is obvious that four decades of de-industrialisation and the economic and social consequences that followed have been devastating for communities like mine. Of course, I understand that we cannot reverse 40 years of decline in 19 months, but we must be bolder than we have been so far, because delay will be lethal.
Let us forget talk of stability. After 14 years of austerity, a global pandemic that exaggerated the inequality that austerity created, and a cost of living crisis that is making people poorer, stability just will not cut it. It is transformation we need. Truthfully, there is plenty of money in society; the problem is: who holds it? Through solutions like an annual wealth tax on the very wealthiest in society—those with assets of over £10 million—and the redistribution of that wealth into public services, education and health, we will improve people’s living standards and effectively tackle the scourge of poverty. Doing that will mean making very different political choices. Our Labour Government must meaningfully shift the dial on poverty in my constituency and across the entire country. We have to make those choices because, frankly, no one else will. There is no doubt that lifting the two-child cap will help many families in my communities, but we cannot stop there, as my hon. Friend the Member for Salford (Rebecca Long Bailey) said.
Sadly, Labour Governments do not come round all that often. We have the chance to be a Labour Government who will transform Britain into a fairer, more equal place, which is what my communities, and others like them all over the country, so desperately need. Tonight, I urge the Government to do much, much more. I urge them to think of previous Labour Governments’ records on lifting people out of poverty, and the words of a previous Labour Prime Minister: we are a moral crusade or we are nothing. It is about time that we acted on those words.
Ann Davies (Caerfyrddin) (PC)
I stand to speak in support of new clause 1, tabled by the hon. Member for Brighton Pavilion (Siân Berry). The two-child cap should never have been introduced in the first place. As one of four siblings, I gently ask the hon. Member for South West Devon (Rebecca Smith): was I, the third born, worth less than my two older sisters or my younger sister? I am the mother of three daughters; was any one of my children worth less than any of the others? Absolutely not. At its most basic, that is what this policy is about.
I was in receipt of free school meals, and I remember well queuing up outside the school secretary’s door to collect my dinner token. I would have been one of these statistics—one of the 31% of children in Wales growing up in financial poverty. It was not emotional poverty—I was not poor in love—but financial poverty. There is a huge difference there, and that is why this Bill is necessary. Ending the two-child cap will cause an 11% fall in child poverty and a nearly 20% drop in deep poverty, according to modelling by the Bevan Foundation and Policy in Practice, but the Bill’s success in tackling poverty is limited by other Government policies, especially the benefit cap.
The benefit cap limits total income from certain social security payments to £22,000 a year—not the £71,000 that has been mentioned—for couples and single parents outside London. It has been frozen at that rate for 2026-27 by the Labour Government. Over 3,000 households were already affected by the benefit cap in Wales as of May last year, and 83% of those were households with children—the majority with three or more children. Those families will not benefit at all from the Bill. In fact, the Bevan Foundation estimates that more than one in five households affected by the two-child limit will not fully benefit from its removal because of the benefit cap.
The hon. Member for Brighton Pavilion’s new clause 1 would place a duty on the Secretary of State to publish an impact assessment of the effects of the Bill. It would include an estimate of those households that would not see the full benefits of removing the two-child limit because of the benefit cap. I support this new clause as a way to allow us to understand the real impact of leaving the benefit cap where it is on families across our nations and our communities, but it does not go far enough, as many have said. As Plaid Cymru spokesperson, I tried to ensure that the UK Government tackled the benefit cap as well as the two-child limit, but the narrow scope of the Bill meant that I could not table amendments to do that. Only the Labour Government can make this Bill include changes to the benefit cap and help further reduce the unacceptable poverty in our communities.
The UK Labour Government have said that they are committed to tackling child poverty. With 31% of children in my constituency in poverty, now is the time for the Government to show that commitment in action. I therefore urge the Secretary of State to use the powers available to him to legislate to scrap the benefit cap alongside the two-child limit, to make a real difference to children and families across all our communities.
Amanda Martin (Portsmouth North) (Lab)
I want to speak in favour of the Bill, and against amendment 1, as it is an attempt to gut the Bill and defeat its purpose entirely. There are moments in politics when the questions before us are not complicated, but simple, and when they are about dignity, compassion and the kind of country that we choose to be.
I will start with an important aspect of the Bill. Forcing women to disclose and prove rape in order to feed their child was one of the most cruel and indefensible features ever embedded in our welfare system. Scrapping that clause restores something fundamental: humanity. There have been, and there are, constituents in Portsmouth carrying trauma quietly, while still working, parenting and trying to hold their family together. They have needed and still need support, not interrogation. No mother should ever have to relive the worst moments of their life just to put food on the table. This requirement should never have been introduced in the first place, and it needs to go.
Alongside this injustice sits another harmful narrative: the suggestion that families affected by the two-child limit are somehow avoiding responsibility, and that just knocking out kids is a case of being lazy and going after money. The facts simply do not support this claim. Around 59% of affected households are already in work. They are nurses, teaching assistants, shopworkers, cleaners, carers—I could go on. In Portsmouth North, I meet parents finishing night shifts or juggling childcare, and parents who through tragedy, such as accidents, redundancy, relationship breakdown, illness or the death of a partner, find themselves in situations they did not start out in when planning their families. Many of them work additional jobs and still skip meals so their children do not have to eat less, only to be told that support stops because of an arbitrary rule. This is not fairness; it is hardship being locked in.
As the Child Poverty Action Group and many others make clear, child poverty damages health, education and long-term opportunities. These are not statistics; they are Portsmouth children with dreams, talents and futures that are—in my and this Government’s opinion—worth investing in. Removing the rape clause and ending the two-child limit says something powerful: dignity matters, work should be respected, and no child should be punished for the circumstances or the place in their family that they are born into.
As the Opposition mentioned the economic impact of the policy, I want to look at the economic picture. Inflation is falling, and the Bank of England expects inflation to get to the target quicker than expected. There have been six interest rate cuts since the election, which is the fastest rate of cuts in 17 years, taking an average of £1,400 off new mortgages. All that has happened without austerity and without making the most vulnerable in our society pay. In Portsmouth, the average mortgage has seen a reduction of £1,750, and £62 million has been provided for local services, such as roads, libraries and reviving high streets. That also includes 15,711 young people benefiting from youth investment. The national debt was cut last week, and we have the largest Budget surplus since records began—without austerity. Thanks to the choices we have made and Bills like this, the economic plan is the correct one, without putting our country’s and my city’s children into poverty. As my hon. Friend the Member for Salford (Rebecca Long Bailey) noted, meeting the cost of tackling poverty at source, rather than paying 10 times more to support children in poverty throughout their lives, is not just morally but economically correct.
This is not just good social policy; it is the mark of a decent society and something I am proud to stand up for. I ask the Minister in his summing up to tell me more about the work the Government will do to monitor the impact of the changes and how they will work across Government in a joined-up, consistent way to improve outcomes for young people and families, such as on workers’ rights, renters’ rights, breakfast clubs, free nursery hours, the skills agenda for apprenticeships and trainee partnerships, and the youth guarantee to name a few.
Kirsty Blackman
It is great to get a chance to speak in Committee on the two-child limit Bill. I am so pleased that this Bill is progressing and that this has happened. This is something we have stood from these Benches and argued about for so many years. It finally seems that it will be real. I got into trouble with a Government Minister for not welcoming the Bill—I have welcomed it at every opportunity and am pleased that the two-child limit is being removed. In fact, I had my own Bill to remove the limit, so I could hardly do anything but welcome this Bill.
I stand to talk about the amendments. We support all three new clauses that have been put forward. New clause 1 would ensure that we look at the benefit cap, and I agree with the points that have been put forward about that. I particularly enjoyed the speech by the hon. Member for Portsmouth North (Amanda Martin) just now. It was spot on in talking about the impacts of poverty on the life chances of children forever. It is not just the two-child limit that has caused this. It is one element that has increased and exacerbated child poverty, but so has the benefit cap. Of the families covered by the two-child limit, 40% have a disabled family member in the household, whether it is one of the children or one of the parents. The benefit cap overwhelmingly hits people with disabled family members.
If we are saying that personal independence payment and the additional payments made through the universal credit system, whether it is the child element or the limited capability for work element, are paid to recognise the additional costs of disability and the complex circumstances people face that contribute to their poverty, inability to work more hours, illness or ill health, why are we putting a cap on it?
Why are we saying, “We believe that children cost more money and that people on universal credit deserve more money depending on how many children they have because children should not go hungry”, which I believe is what the Government are saying here, but then capping it? Why are we saying, “Children should not go hungry—unless you hit the benefit cap, can’t take on additional hours because of a set of complex circumstances or have complex health needs that require an adapted house that costs more to rent”, for example? Why are we saying that those additional payments are reasonable, but only for some people? The Government need to look at the benefit cap again. That is covered by new clause 1. There are a number of things the Government need to look at again, which are covered by the other new clauses.
The Government have made welcome moves on clawbacks and universal credit repayments. They have reduced the percentage that people can pay back in clawbacks. However, they have not taken any steps to look at the affordability of clawbacks. They are just set at a percentage without taking into account whether people can afford to pay back universal credit that has been overpaid or paid as an advance. That means that some families are significantly disadvantaged. They may have more outgoings because they live somewhere like Brighton, where rents are absolutely through the roof, or like the north of Scotland, where heating costs a fortune because it is freezing more often than it is down here. None of the repayment schemes look at these additional issues or at whether people can afford them. I also urge the Government to look at whether that is contributing to child poverty.
The hon. Member for South West Devon (Rebecca Smith) said something along the lines of, “We don’t solve poverty by ensuring that people have money,” but we literally do. We literally solve poverty by ensuring that people have enough money. That is the solution. The cure for poverty is to have enough money to pay for the heating, the food your children need, or a pair of shoes when your child needs them. It is incredible how fast they grow, by the way. I think my son went through about five sizes in the space of a year and a half. It is impossible to keep children in shoes that quick, or even to get to the shops that quick. Children grow really quickly and it costs an awful lot of money. It is therefore really important that the Government’s child poverty measures are monitored correctly to ensure that they make all the differences the Government are proposing. We need to see whether enough of a difference is being made and whether the measures are having the effect on outcomes that we want to see.
The Government put forward a child poverty strategy that I felt was deeply unambitious. Other than the two-child limit stuff, it mostly laid out things that the Government had already announced. It was also almost entirely about only England or England and Wales and did not apply in Scotland, other than the universal credit stuff. For example, none of the childcare, free school meals or school uniforms stuff applies in Scotland.
I still feel that we do not have enough information about monitoring, so the three new clauses, which would provide for additional monitoring of the reduction in child poverty, are incredibly important. The Government will not produce their baseline monitoring and evaluation report on the child poverty strategy until summer 2026, so we do not yet have enough information about how they will measure that.
I would love it if we had Governments who were absolutely up front and honest about which measures are working and which are not, but we have consistently had Governments who introduce primary and secondary legislation but fail to do post-implementation reviews of it. They fail to tell us whether the legislation has had the intended consequence. Did it make £30,000? Did it make £30 million? That is perhaps what the Government told us the legislation would make, but because a post-implementation review does not happen, we do not see whether it was effective.
Tom Hayes (Bournemouth East) (Lab)
The hon. Lady makes an important point about it not being a child’s fault that they are growing up in poverty. I grew up in poverty, caring for two disabled parents, and I would also say that it is not the parents’ fault; it is society’s fault. When we say that people should be poor, and we create the structures and systems that enable that, we are all responsible. The Bill is just one way in which this Parliament can say to the country, “We will not put up with poverty for anyone ever again—it is not people’s fault.” Does she agree?
Kirsty Blackman
That is absolutely true. I accept the rebuke, which is completely reasonable. It is not the parents’ fault—I should have been far clearer about that. I tend to think that poverty and a lack of privilege are caused by a lack of choices. Poverty means that people cannot make mistakes, while privilege means that they can. I can make mistakes because I have enough of a financial cushion and family support. For people who live in poverty, without family support or with poor mental health, one mistake can mean very quickly spiralling into an un-rescuable situation. That is how I think about privilege: those situations are not anybody’s fault. Just because I am lucky enough to be in a more privileged position, I am allowed to make far more mistakes than someone who is struggling on the breadline. How is that fair?
Conservative Members made comments about people working hard. A lot of the people who are on universal credit while working are in the jobs that we really need people to do. They work as carers, shopworkers and all sorts of other jobs that not one of us would say are easy. I do not know if any Members have worked as care workers. The hon. Member for Bournemouth East (Tom Hayes) has been a carer and knows how physically and emotionally demanding that is. Someone working in care and being paid the minimum wage is doing a physically demanding, very necessary and hard job, yet they might still be in receipt of universal credit because they earn so little. I hate the distinction made between people who work hard and people who do not, when that is based simply on salary—not the fact that lots and lots of people work hard for very little money, because the minimum wage is not a real living wage but just a minimum wage.
I think I have been clear about some of the issues raised in the debate, including the benefit cap, issues faced by disabled family members and disabled children, and the effect of these measures on child poverty, destitution and wider social outcomes. On that last point, all of us, and particularly Governments, could probably do more about the impacts of poverty and ensuring that those are also measured.
Some of the monitoring and evaluation suggestions for the child poverty strategy look at the cold, hard measure of how many children are in poverty, and at how those numbers are reduced or increased as things go on, but they look less at some of the impacts. To be fair to the hon. Member for South West Devon, how do such measures impact on school readiness? Can we see more information on whether the Government’s plans have had an impact on school readiness? Has there been an improvement in the mental health of young people as a result of these measures on child poverty?
I still think that the Government are deeply unambitious and they could do more on the benefit cap. They could also do more, for example, to match the Scottish child payment; child poverty has been reducing in Scotland because that is the key mission of our SNP Government. It is worth looking at what works anywhere in these islands, and seeing whether it could or should be replicated to ensure that we reduce poverty and protect children, and that everybody has those opportunities—no matter how much their parents earn, how many children are in the family and whether there is a disabled family member. It is important that every one of us champions every child in our constituencies, and tries to ensure that they get the best possible start in life.
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
I call the Minister.
Sir Stephen Timms
I thank all Members who have contributed to the debate. Interventions in the child poverty strategy will lead to the biggest expected reduction in child poverty over a Parliament since comparable records began. I well understand the concerns of those saying we should go further, and it is certainly right to urge the Government to do that, but let us recognise how big a change this will be. Removing the two-child limit is the key step. It will help children to live better lives, fulfil their potential, have better mental health, do better at school, and thrive in the future. That change is in the national interest.
The amendments propose a number of reports on different topics, and I am grateful that everybody who has spoken to them has indicated that they support the Bill. New clauses 1 and 4 ask the Secretary of State to report on the effect on children in households subject to the benefit cap. Indeed, new clause 4, tabled by my right hon. Friend the Member for Hayes and Harlington (John McDonnell), fulfils a commitment that he made on Second Reading to devise an amendment that would have that effect. It is an important point, and something we need to monitor carefully, but it is in the best interests of children to be in working households—and keeping the benefit cap in place protects the incentive to work. Work incentives are important. Under the policies of the last Government, far too many people gave up on work and concluded that it was not worth their while. We want it to be clear to everyone that it is worthwhile to be in work, and the Universal Credit Act 2025, enacted last summer, made an important step in that direction.
Removing the two-child limit does not undermine work incentives. From time to time, the Conservatives suggest that it does, but actually it does not. Removing the two-child limit increases the income of many families in work and increases the reward for work, and it does not undermine work incentives.
John McDonnell
There is an element of contradiction in what the Minister has said. Until now, the Government’s argument has been that one of the most disastrous disincentives to work is low wages, so they have rightly concentrated on raising the minimum wage and aiming for a proper living wage. Our argument has never been that lifting people out of poverty is a disincentive to work—it has always been about low wages.
Sir Stephen Timms
My right hon. Friend is right that raising wages has been a crucial part of the Government’s strategy, but removing the benefit cap would reduce work incentives. My hon. Friend the Member for Salford (Rebecca Long Bailey) said that there is no evidence that that is the case, but actually there is such evidence—from the Institute for Fiscal Studies, for example. It is not a huge amount of evidence but nevertheless there is evidence that the benefit cap provides a modest but significant incentive for work. Our view, for the time being at least, is that that should be maintained.
We have published an impact assessment as part of the Bill. It sets out the number of households that will not gain in full or will only partially gain from this measure because of the benefit cap. The Department publishes quarterly statistics on the benefit cap, which includes the number of households that are capped and how that changes over time. The most recent quarterly statistics show that of 119,000 households capped at the start of the quarter that ended in August last year, 40,000—about one third—were no longer capped by the end of the quarter, although others were newly capped, so there is a lot of churn in the cohort of capped households. The 40,000 households that left that cohort included 2,900 who had ceased to be capped because their earnings exceeded the threshold of full-time earnings at the national living wage. We want to encourage more people to make that transition.
We also publish statistics on the number of households affected by both the two-child limit and the benefit cap, with the next annual statistics to be published in the summer. After that, the quarterly benefit cap statistics will show how the number of capped households has changed after the two-child limit has been removed.
Kirsty Blackman
Those statistics will show the number of households that are capped, but they will not show how many have come into the benefit cap as a result of the removal of the two-child limit. Will the Minister be able to show a link between how many new families are being capped as a result of the two-child limit, meaning that those households are now disadvantaged again, even though the two-child limit has been removed?
Sir Stephen Timms
We have set out estimates of the effects that we think will result from the removal of the two-child limit, and there will be more information in the baseline evaluation report that we will publish in the summer.
My hon. Friend the Member for Portsmouth North (Amanda Martin) made some important points. I particularly agree with her about the importance of scrapping the rape clause, which had been a feature of the legislation since the two-child limit was introduced. She is right that we need to understand properly the impacts of policy interventions. We have published a monitoring and evaluation framework alongside the child poverty strategy that sets out how we will track and evaluate progress, reflecting our commitment to transparency, accountability and continuing to learn from what is effective. The baseline report will be published in the summer, as I have said, and set out details on plans alongside the latest statistics and evidence, and we will report annually on progress after that.
The information that we are committed to publish will provide the information looked for in these new clauses. I very much look forward to the report from the Work and Pensions Committee, which was referred to in an intervention by the Chair, my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams).
Siân Berry
Will the Minister tackle the point that I made in my speech? There is a possibility of people being denied disability benefits, as the result of separate work for which he is responsible, and potentially falling into the cap by losing the exemptions. That worries me greatly with respect to my own constituents.
Sir Stephen Timms
One of the new clauses touches specifically on disabled people. That new clause was not moved, but, as the hon. Lady knows, we are undertaking a review of personal independence payments, which I am co-chairing with others. We will see what the outcome of that is, but if there are to be changes in eligibility we will certainly set out details on the effects on the benefit cap and other things as those things progress.
I ask my hon. Friend the Member for York Central (Rachael Maskell) to place an order on my behalf for Kate Pickett’s latest book, which I am very keen to have a look at.
New clause 2 is specifically about households in poverty with a disabled family member. I agree that monitoring and evaluation of that and other things is very important, but we should not have an assessment that sits in isolation from the impact assessment that I have described, which we are committed to delivering alongside the wider child poverty strategy.
New clause 3 asks that we review the impact of child poverty on destitution and wider social and economic outcomes. I am grateful to the hon. Member for Witney (Charlie Maynard) for his support for the Bill. We have set out a second headline metric; we will measure deep material poverty in the child poverty strategy in the monitoring and evaluation framework. In that evaluation, we will track progress against two headline metrics. The first metric is relative low income—a metric embraced by David Cameron when he was the leader of the Conservative party but sadly not now recognised by the Conservatives. The second metric is deep material poverty, which will pick up on the concerns that the hon. Gentleman raised.
Rebecca Smith
I have been wanting to mention this point throughout the debate, but I have not had the right opportunity. Obviously a large number of these new clauses look at reporting back. I appreciate that the child poverty strategy involves a lot of reporting back, but is the Minister aware that the Department for Education does not yet have the records of which local councils have taken up auto-enrolment for free school meals? While the child poverty strategy has introduced universal breakfast clubs, there is no matrix to be able to decipher whether auto-enrolment for free school meals is working. In some cases, such as in the county that I represent, that has meant a significant amount of money for those local authorities deliberately to try to tackle poverty. Will he look into tackling that?
Sir Stephen Timms
I am sure that the hon. Lady will raise that matter with the Department for Education. That is a very important point.
We are extending free school meals to all children in families claiming universal credit; that is an important additional element of the child poverty strategy. There will be a comprehensive programme of analysis of the drivers of child poverty and the impact of specific interventions so that we can better learn what works and assess what further steps are needed. We will continue to gather evidence for further interventions beyond those that we have announced so far.
For too long, the tide of child poverty was allowed simply to rise. It is high time to turn that tide. This Bill is the centrepiece of our child poverty strategy. It will deliver the most substantial reduction in child poverty of any Parliament since records began and make a decisive break from the inaction and indifference of the past. Government can make a difference: we can help children and their families to lead better lives now and in the future for the benefit of all. It is for all those reasons that I hope the Committee will support the Bill and reject the new clauses.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clauses 2 and 3 ordered to stand part of the Bill.
New Clause 3
Review of the impact of the Act on child poverty, destitution, and wider social and economic outcomes
“(1) The Secretary of State must, within 12 months of this Act coming into force, review the effect of this Act on—
(a) overall levels of child poverty in the UK;
(b) levels of destitution and deep poverty among households with children;
(c) households in receipt of Universal Credit which include children;
(d) educational outcomes for children in households affected by poverty;
(e) physical and mental health outcomes for children in households affected by poverty; and
(f) longer-term impacts on economic participation, workforce skills, and demand on health and welfare services arising from child poverty and destitution.
(2) The Secretary of State must lay before Parliament a report setting out the conclusions of the review.”—(Charlie Maynard.)
This new clause would require the Secretary of State to undertake a review of the effects of the Act on child poverty, destitution, and wider social and economic outcomes.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Sir Stephen Timms
I beg to move, That the Bill be now read the Third time.
Scrapping the two-child limit is an investment in the future of children and of the country. Two million children will benefit from this Bill. We will be held to account on progress through the monitoring and evaluation arrangements we have put in place to ensure that the change we are making is genuinely lasting. I want to thank every Member who has contributed to these debates. Removing the two-child limit from universal credit will help more children to fulfil their potential, to grow up make a positive contribution and to be part of a fairer, stronger country. I hope that the whole House will now support this vital measure.
Madam Deputy Speaker (Caroline Nokes)
I call the shadow Secretary of State.
Helen Whately (Faversham and Mid Kent) (Con)
I thank my hon. Friends for their contributions during the passage of this Bill. In particular, I thank my hon. Friend the Member for South West Devon (Rebecca Smith), who has argued with true passion against the Bill, drawing on her own experience as well as her sound principles. I also thank my hon. Friends the Members for Solihull West and Shirley (Dr Shastri-Hurst) and for Hinckley and Bosworth (Dr Evans), my right hon. Friends the Members for Tonbridge (Tom Tugendhat) and for North West Hampshire (Kit Malthouse) and my hon. Friend the Member for Bridgwater (Sir Ashley Fox), who spoke on Second Reading, and my hon. Friend the Member for Weald of Kent (Katie Lam), who spoke in Committee this evening, and pointed out with customary clarity the flaws in the reasoning of Labour Members.
We have all seen the strength of feeling among MPs who support this Bill, but passion does not make a policy right. Children are a blessing, but they are also a responsibility. Parents up and down the country work long hours and make sacrifices to bring up their children. Many couples question whether they can afford one child, let alone three, four or five. They make tough but responsible choices, yet this Bill means they will be taxed to fund other people who make choices they know they cannot afford, and that is fundamentally unfair. It is unfair to people who make responsible decisions, unfair to people who decide to live within their means and unfair to the people who cannot get a job, let alone afford to start a family, because this Government are wrecking the economy with ever higher spending and higher taxes.
People do not get a pay rise from their employer when they have another child; they make their money stretch further. However, for people on universal credit, this Bill means their benefits will rise by thousands of pounds for each extra child they have. Some families are about to get tens of thousands of pounds extra. A single parent with five children will be able to get £10,000 more, and an annual income just from benefits of over £45,000 untaxed. To get the same through work, someone would need to earn £60,000.
I heard that the Secretary of State for Work and Pensions, who is standing behind the Chair, was due to talk about welfare reform this evening. I say to him and all Labour Members that anyone serious about welfare reform or about ending the welfare trap would vote against a Bill that makes benefits pay this much more than work. Anyone serious about fiscal responsibility would not vote for a Bill that adds £3 billion a year to the ballooning welfare budget and costs £14 billion over the next five years. That money is not just sitting there jingling in the Treasury bank account waiting to be spent on this; it will have to be taken from a small business desperately trying not to let staff go, from a family already struggling with food and energy costs, or from the next generation through higher borrowing. However Ministers dress it up, someone else will pay.
Labour Members have said that this Bill cuts child poverty. What they generally mean is that it reduces relative poverty, a statistic that tells us nothing about whether children’s lives are actually looking up. They ignore that relative poverty tends to look better when the country gets poorer, which is exactly what their policies are doing to this country. They have done it before and they are doing it again—taxing more to spend more, killing growth and killing jobs.
What really makes a difference to children’s lives is having their parents in work, but what are the Government doing about that? They are making it less likely. Under this Government, we have seen—[Interruption.] I know that Labour Members do not want to hear it, but we have seen the fastest increase on record of children growing up without a parent in work. Unemployment has gone up every month; now it is at its highest for five years.
This debate is about more than just one policy; it is about two different visions for our country. Labour’s answer to every challenge is the same: spend more money. Labour Members see people as victims of circumstance, and their instinct is always to compensate rather than change the circumstance. We see it differently. We know that children are better off if the country is better off; if there are more jobs, higher wages, lower inflation and stronger growth. Look at the moments in our history when living standards rose for everyone. It was when people were motivated to strive, ideas were turned into businesses and hard work reaped rewards. That is how countries get ahead and their children thrive. [Interruption.]
I do not expect the argument that I am making to be popular in this Chamber, although—[Interruption.] I am not expecting Labour Members to like what I am saying, but it is popular out there in the real world. I know that every other party represented here wants to expand the state—not just Labour, but the Lib Dems, the Greens, the SNP, Plaid, and who knows how Reform will vote tonight? I can see one Reform MP is here; maybe somebody will help his colleagues to find their way to the right Lobby tonight.
I think Reform now says that it would keep the cap, but it still does not back it in principle; it is just a question of timing. Well, well. The Prime Minister has decided that the time is now because he needed to save his skin. He is not a Prime Minister who will take the tough decisions to control the welfare bill and make work pay, because that would require a backbone and the support of his Back Benchers. Only Conservatives are prepared to make the argument for welfare savings and stand up for principles like fairness, personal responsibility and living within your means. Other parties compete to be more generous with other people’s money; we do not. Conservatives believe in a country where work pays, responsibility is valued, and welfare is a safety net, not a lifestyle choice. That is the difference not just over the two-child cap, but over the direction of Britain itself.
Kirsty Blackman
The SNP has been at the forefront of opposing this policy since the very first day it came in. Since the very first day that we spotted in the legislation the rape clause, which meant that people were going to have to tell the Department for Work and Pensions that they had been raped in order to get an exemption from the two-child limit. Women had to go through that cruel, inhumane system just to ensure that their children were eligible for the social security payments. From day one, this was a cruel policy from the nasty party.
This is not a debate about whether people should be working or not. This is not an issue that pits the workers against the workless. This is about children. This is about kids being able to afford to eat. This is about their parents being able to ensure that they can grow up in a house that is warm; that they can have food in their tummies before they go to school; that they can have shoes that fit. This is about ensuring that kids are looked after and have the best possible life chances. This is about ensuring that poverty is reduced. No child should be growing up in poverty. No child, whether their parents are working or not, should be growing up in poverty.
The Conservatives talk about making work pay. Well, they could have put in a real living wage, but they did not; they put in a pretendy living wage and called it the living wage, knowing that people could not actually live on it, so I am not sure they have a huge amount of high ground when it comes to making work pay. In fact, the system we have had until now has been the system the Conservatives created, so they do not have a great amount of high ground over the size of the social security system that Labour has been working with either, because that is the system they made.
I am pleased that Labour is removing the two-child limit today. I am pleased that it will come in from April. I am not terribly happy that it has taken us this long to get to that point.
Before I sit down, I want to commend every person across this House who has supported the removal of the two-child limit, and particularly those who have chosen to do so when their party did not want them to—that is the worst and most difficult position to be in. I really appreciate those who were willing to stick their head above the parapet and do what was right on this. I know it is incredibly hard to take that step.
We have heard lots of criticism today, with lots of people saying that the Bill could go further and that there is more that could be done. There is, inevitably, more that could be done; there is always more that could be done to keep children out of poverty. However, this is a good step. Children will be better off as a result. Children will have improved life chances. What are we all here for, if not that?
Question put, That the Bill be now read the Third time.
Universal Credit (Removal of Two Child Limit) Bill
Tuesday 24th February 2026
(2 weeks, 6 days ago)
Lords ChamberRead Full debate Universal Credit (Removal of Two Child Limit) Bill 2024-26 Read Hansard Text Amendment Paper: Committee of the whole House Amendments as at 23 February 2026 - large print - (23 Feb 2026)
Universal Credit (Removal of Two Child Limit) Bill
Thursday 12th March 2026
(4 days, 2 hours ago)
Lords ChamberRead Full debate Universal Credit (Removal of Two Child Limit) Bill 2024-26 Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 23 February 2026 - large print - (23 Feb 2026)
The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, this Government believe that the UK should be a country where every person has the opportunity to fulfil their potential. That is why we are so committed to removing the barriers that stop people thriving and becoming all that they can be. Doing this will benefit not just the individuals, it will benefit our country. So I am delighted to be here today to move Second Reading of the Universal Credit (Removal of Two Child Limit) Bill. It makes a major contribution to tackling the poverty that limits children’s chances in life, and often for life.
There are now four and a half million children in poverty—900,000 more than there were in 2010. To put that in context, if we picture a classroom of 30 children, at the moment around 10 of them will be living in poverty. Some 2 million of our children are in deep material poverty, lacking the basic essentials such as a warm home or healthy food—things without which no child should be growing up. It is shocking enough that so many of our children have to live through childhood like that, but it is even more shocking when we consider the hugely detrimental consequences that growing up in poverty has on children’s health, education and future employment prospects.
Just one in four children in families with the lowest incomes gets good GCSEs. As adults, those who grew up in poverty are more likely to be unemployed or to find themselves in low-skilled, lower-paid jobs. Those who grow up poor clearly do not lack talent; what they lack is opportunity. As a result, our country is missing out on their gifts and their contributions. We are determined to break this link between children’s backgrounds and their future success. That is why, since coming into office, we have taken significant steps to help families tackle poverty and give every child the best start in life: increasing the minimum wage, expanding free school meals for over half a million children, investing in social and affordable housing, and funding more Best Start Family Hubs. We are now pulling the single most cost-effective lever available: removing the universal credit two-child limit, which will lift 450,000 children out of poverty.
This is the right move to extend opportunity, and it is right because our system should not be penalising so many of our children for the circumstances of their birth—circumstances their parents may not have chosen or expected. Life is unpredictable, and crisis can hit anyone regardless of the choices they have made or the size of their family. Marriages break up; parents lose their jobs or get sick, or injured, or die.
That unpredictability is reflected in the fact that half the families who will benefit from lifting the two-child limit were not on universal credit when they had any of their children. These are people who found themselves in need of help after decisions about family size had been taken. It simply is not right to draw dividing lines in the way the two-child limit sought to do, especially when over half the families affected by the two-child limit are already in work, and, of those who are not working, a significant number are affected by serious health conditions or caring responsibilities.
Illness, disability, bereavement, unemployment, becoming a carer—these things can hit any one of us, and have probably hit many of us in this Chamber already. Our welfare state exists to pool risk, to give all of us some protection from the impact of life’s slings and arrows. Some will look only at the cost, without looking at the cost of failing to offer support. We simply cannot afford to sit on our hands and wait for the costs of poverty to spiral. Without intervention, 150,000 more children will be pulled into poverty by 2030. That is 150,000 stories of missed opportunity, of deeper inequality, of lost productivity. But if tackling poverty is vital not just for the lives and opportunities of children, it is vital for our economy. Every pound we spend lifting children out of poverty saves so much more in future health, education and social security costs.
Few investments will reap rewards as great as investing in the next generation, in our future workforce. Failing to act on child poverty will cost Britain far more than investing now. That is why removing the two-child limit is part of our wider child poverty strategy. We committed in our manifesto to making good work the foundation of our approach to tackling poverty. Parents are doing all they can to support their children. Parental employment rates are already high but, with almost three-quarters of children in poverty being in a working family, too many parents find themselves in jobs where they are still struggling to support their families.
Meanwhile, too many of those who are not in work face barriers to entering the labour market, whether that is down to health, disability, a lack of childcare, poor skills, public transport not working in their area, or all kinds of other barriers. We want every parent who can work to feel the benefits of secure, rewarding jobs that enable them to get on in life, to support their families and to set an example to the next generation. That is why we will deliver a step change in employment and skills support for parents, helping them to balance work and caring responsibilities through high-quality, flexible jobs and improving access to affordable childcare.
The expansion of childcare comes alongside other measures in our child poverty strategy to drive down working poverty, including raising the minimum wage and creating more secure jobs by strengthening rights at work. The measures and the strategy will lift 550,000 children out of poverty. These interventions will lead to the largest expected reduction in child poverty over a Parliament since comparable records began. Together, all this represents a strong start. It kick-starts action and ambition over the next 10 years, responding to the immediate pressures families face now while delivering change to fix the structural drivers of child poverty.
But we do not underestimate the scale of the challenge: to build a society where every child grows up safe, warm and well fed, not held back by poverty but helped forward by government. So we will monitor our progress using two main metrics. First, we will use the internationally recognised and well-established “relative low income after housing costs” measure to monitor overall child poverty. Secondly, there will be a new measure of deep material poverty, which we have developed to assess families’ ability to afford the essentials. This takes account not just of their income but of the cost of essentials, their overall financial situation and the support they receive locally. It is not just the number of children in poverty that matters; it is the depth of that poverty too.
We are committed to ensuring that removing the two-child limit, along with other measures in the child poverty strategy, delivers the results children need and deserve. To support this, we have published a monitoring and evaluation framework alongside the strategy. That sets out how we will track our progress and the success of these policies, as part of an ongoing commitment to transparency, accountability and continued learning. This includes focused analysis to understand what drives child poverty and the impacts of the changes we are making, so that we can build on our successes and continue to make the case for further intervention. We will publish a baseline report in the summer setting out the latest statistics and evidence, with annual reports thereafter to monitor and evaluate progress.
This Government will not stand by while millions of children face the long-term harm that poverty brings. Families in poverty cannot afford to give their children what they need to grow and to achieve their potential. We will boost family incomes through employment and social security, drive down the cost of essentials and strengthen local support services. We are investing in the future of our children and will hold ourselves to account on delivering the impact we promised through this Parliament and beyond. We will remove this cruel policy, which has pushed 300,000 children into poverty.
I look forward very much to this debate and especially to the maiden speeches of my noble friends Lady Antrobus and Lord Walker of Broxton and the noble Baroness, Lady Teather. Between them they bring an amazing wealth and breadth of experience and knowledge to our House. I am delighted that they have chosen this extremely important Bill to make their first contribution to our proceedings. I beg to move.
Baroness Stedman-Scott (Con)
My Lords, I too am pleased to contribute to this important debate and look forward to the maiden speeches of the noble Baronesses, Lady Antrobus and Lady Teather, and the noble Lord Walker of Broxton. We welcome these wonderful people to our House and look forward to their contributions.
I feel I must set the scene and set it out very clearly. I say from the outset that we on the Opposition Benches do not support this Bill; in fact, we oppose it. That does not mean in any way that we do not care about children and families—quite the contrary. We believe there are other ways to support them that mean that money can be used differently to achieve the objective of improving their lives. I state publicly that I respect the consistency and tenacity of the Minister and, indeed, the noble Baroness, Lady Lister, in their campaigning in this area. We respect it. We may not agree with it, but we give credit where it is due.
We are far from alone in opposing the Bill. On this question, we stand with a clear majority of the British public. Polling consistently shows that more than 60% of people in this country support retaining the two-child benefit cap, with that support stretching across voters of all major political parties. What this debate increasingly appears to be about is not responsible public policy but political party management. As events over the past year have made clear, this measure is not being brought forward because the public have demanded it. Indeed, they are clearly opposed to it. We should all pause and consider why hard-working taxpayers are being asked to shoulder the financial consequences of the Government’s inability to manage their parliamentary party. That is not responsible government; it is a deeply troubling response from the Government to unrest.
Many across this Chamber will have their own principles and reasons for opposing this policy, but I begin with a simple illustration of what this policy and this debate mean in practice. Let us take the London Borough of Hackney. There, 29% of children live in households affected by the two-child limit without an exemption—the highest proportion anywhere in the country. As of August last year, there were 92 households in Hackney on universal credit with five or more children where the youngest child was born after the 2017 cut-off date. Unless they qualify for one of the limited exemptions, those households fall within the scope of the two-child limit. In other words, they already receive less than the maximum universal credit they would otherwise be entitled to. Yet even with the cap in place, these households receive on average £5,152 per month in universal credit. That is more than the take-home pay of someone earning around £88,000 a year. Across the country, the welfare bill for five-child households within the scope of the cap is already around £720 million per year. That is with the two-child limit still in place.
Set that against the reality faced by many working families. In Hackney and communities across the country, there are parents in work earning far less than that level of take-home pay who would love nothing more than to have a third child. But they sit down at the kitchen table, look at the household finances and make the heartbreaking decision that they simply cannot afford it. At the very same time, their taxes are funding households down the road who receive an income from universal credit that, in effect, exceeds their own. If this cap is removed, those households will not face the same choices about how many children they can afford.
I ask the Minister a simple question: how can that possibly be fair? How can it be right that working people supporting our economy and paying the taxes that fund the system must carefully limit the size of their own families while being asked to fund a system in which those not in work face no such constraint? That is the fundamental question of fairness at the heart of this debate, and it is why a clear majority of the public vehemently support the cap.
There is a wider point about economic development. More than this, what separates us on these Benches from the Minister and her Back Benches is our view that a handout is not the same as a hand up. The evidence is clear that the most effective way to tackle poverty is to provide people with the means and the incentives to provide for themselves. The single biggest factor in a child’s life chances is whether parents work, and removing the cap reduces the incentives to work altogether. That is clearly not a route out of poverty. Of course support should be targeted at those who need it—we have no argument with that—but it should not create a model where households on benefits are rewarded in a way no working family ever would be. That undermines both fairness and the incentive to work. As I have said, work is the only meaningful way that we will solve the problem of child poverty in the medium and long term.
When the incentive in place is to get more on benefits than working, why would you go to work? I am concerned by the view expressed by Labour Back-Benchers and the Government that increasing the generosity of the welfare offer in some way solves the issue of poverty. This approach does nothing but provide a sticking plaster to mask the fact that a dramatically increasing number of people rely solely on the state for their subsistence. This comes at a major and increasing cost to those who work and contribute, as the Spring Statement disturbingly underscored when it revealed that welfare spending will rise by 5.8% this year to an absolutely staggering £330 billion—around 11% of GDP.
My party has been clear. We would reinstate the two-child cap. Only last week my right honourable friend, Kemi Badenoch, the leader of our party, set out why. The savings from this policy could be redirected toward one of the more fundamental responsibilities of any Government—the protection and defence of the realm. Again, I stress that it does not mean that we do not care about children and families, but those savings would allow the recruitment of 20,000 additional soldiers and fund the accommodation, equipment and support they need to do their jobs properly at a time when the demands on our Armed Forces are growing and the world is becoming more uncertain. That is a central priority.
After the extraordinary spectacle of recent weeks, when the world has seen the Government unable and unwilling to defend British sovereign territory, the case for properly funding our Armed Forces has become more urgent than ever. Our defence should not be an afterthought. It should be the first duty of the state.
That is why it is so troubling that money that could be strengthening our national defence is instead being spent to manage the Government’s internal policies and politics. The country is being asked to foot the bill not because the policy case has been won but because the Government and the Chancellor have chosen not to pursue the welfare reforms they themselves once supported because they are too weak to get them past their own MPs. Do His Majesty’s Government have any plans to review the welfare state and to change it to a system that incentivises people to work, rather than live permanently on benefits? The defence of the nation should always come before the management of the governing party but, unfortunately, the policy we are discussing today is a manifestation of just that.
Ultimately, this debate comes down to three simple principles: fairness, responsibility and the Government’s priorities. It is about fairness, because it cannot be right that working families who get up every day, pay their taxes and carefully weigh what they can and cannot afford for their own children, are asked to fund a system in which those same choices do not apply. A welfare system that loses sight of that basic sense of fairness will quickly lose the confidence of the people who sustain it. It is about responsibility, because tackling poverty cannot mean simply writing even larger checks from the state. Real and lasting progress comes from helping people into work, strengthening incentives and ensuring that welfare is a safety net, not a substitute for independence. A system that blurs that distinction ultimately fails the very people it claims to help. It is about priorities, because every £1 spent by the state is a £1 taken from taxpayers and other priorities. At a time of enormous pressure on the public finances and growing threats in the world around us, the Government must be honest about where those resources should go.
This Bill fails on all three counts. It weakens fairness, it risks entrenching dependency rather than tackling its causes and it diverts scarce resources away from the fundamental duties of government. For those reasons, and in the interest of fairness and sound policy, these Benches cannot support the Bill. We urge the Government to keep the cap; it is what the country wants and what the country needs. I know the Benches opposite will not agree with me one little bit—I am under no illusions about that. I remind the whole House that you cannot make a poor man rich by making a rich man poor and you cannot help the wage earner by punishing the wage payer.
Baroness Teather (LD) (Maiden Speech)
My Lords, I am grateful for the opportunity to make my maiden speech here during this Second Reading debate. Supporting children and tackling the impact of poverty and disadvantage have been core themes of my work, both in the other place and in my charity and NHS board roles since.
I will turn to the substance of the Bill in a moment and say some personal words about myself at the close. First, I hope noble Lords will indulge me in offering some heartfelt thanks. I am indebted to the many people who have guided me so patiently in my first few weeks. Having done my apprenticeship at the other end, this place is at once both familiar and very different. I am still navigating by reference to glimpses of green carpet that border red, meaning getting anywhere is taking me twice as long as it should.
I am particularly grateful to Black Rod’s team and to the doorkeepers, who made heroic efforts to support my husband, who is a wheelchair user, at my introduction, as they have today. He is here to listen, along with my parents, and I am very grateful to them for being here. I thank the clerks, the Lord Speaker, the attendants and my supporters—my noble friends Lord Dholakia and Lady Kramer—and the youthful staff team in the Lib Dem Whips Office, who are a daily source of facts, sanity and humour.
The Bill is hugely welcome. While some might say that it is not before time, I want instead to recognise the work done by the Minister in this House—the noble Baroness, Lady Sherlock—and the Secretary of State in the other place to bring this Bill forward. I served as Children and Families Minister, and I recall the uphill task of co-ordinating child poverty strategy across departmental silos and coalition “differences of opinion” as somewhere between cat herding and global hostage negotiation—skills that might yet come in handy if we end up in protracted ping-pong here.
I am strongly of the view that the removal of the two-child limit in universal credit is the right thing to do. I have always been a sceptic about arbitrary caps in welfare policy, which seem often to be performative rather than strategic. People are made vulnerable when policy cannot flex for the complexity of real life. More than 1.5 million children are currently affected by the two-child limit, denied what they need to thrive and growing up where hunger, cold and uncertainty are daily realities; missing opportunities to join school trips and activities; and leaving them more likely to be bullied at school—something I know from my most recent role leading a children’s charity dedicated to that cause. Poverty affects children in every community, which was the premise behind targeted support through the pupil premium, but this two-child limit falls on regions unevenly and disproportionately on families from Black and ethnic-minority communities, baking in inequality and damaging life chances for decades.
Removing the two-child limit will make an impact on hundreds of thousands of children. But in the spirit of a maiden speech, I suggest gently that mitigation of its forerunner, the benefit cap, which interacts with the high cost of rented housing, might also be needed. This might be, for example, by reviewing the cap annually in line with the cost of living or disregarding child benefit from the total.
I want to say something about language and narrative. The Joseph Rowntree Foundation’s UK poverty report this year describes the impact of an increasingly toxic public debate on those living in poverty, saying that the
“values of compassion, justice and equity … are too often missing”.
Stigma and scapegoating really matter. Money fills the electric meter, buys the school uniform and pays for breakfast, but it is language that limits expectations, hardens attitudes and severs relationships.
I spent most of my decade-long civilian sabbatical away from politics leading a UK charity in the refugee sector, the Jesuit Refugee Service. I learned much at JRS about the way destitution and homelessness eat away at dignity, but also about the transformative power of relationships and community. Towards the end of my time at the charity, we started a new project to train staff in mediation skills, encouraging them to listen and engage in conversations locally and to learn from people with different, even opposing perspectives about our work. It was experimental in form, but the othering that we had witnessed had been so devastating that we were convinced that we must not contribute to it further.
Our potential to create change and solve problems in this polarised age depends on how well we collaborate with people who do not always share our worldview—resisting the urge to stereotype and being open to the idea that working with people we do not agree with might yield new solutions. One of the great joys of my first few weeks here has been the warm and fascinating conversations with noble Lords from different parties. This cross-party opportunity is a seam that I hope to mine.
I finish my remarks by sharing with noble Lords something very personal. I have spent most of my adult life working with and for people who are sidelined—those who struggle to get their voices heard and their experiences understood. Then, four years ago, I suddenly lost my voice. A random neurological hit knocked out a nerve to my vocal cords, leaving me struggling to speak. It took two years of speech and language therapy at Guy’s Hospital and specialist voice rehab to teach my body to adapt to this state and return a singing and useful voice—help for which I am deeply grateful.
The words of the Letters Patent read by the clerk at our introduction to this House confer on each of us a voice in this place. I understand the privilege of this gift—it is something that my body knows to be true. So I pledge to use my voice here to create space for all those whose voices continue to be silenced and whose experiences are missing from our deliberations. I hope to use my voice to enjoy as many cross-party conversations and collaborations as tea in the Long Room will sustain.
Baroness Janke (LD)
My Lords, it is a great privilege to follow my noble friend Lady Teather’s eloquent maiden speech, and I congratulate her on it and welcome her thoughtful remarks. In her speech, her expertise and experience as a former Minister for Children and Families shone through, and her long-term commitment to work with charities and the NHS show her deep understanding of poverty in all its forms, particularly for refugees. I am sure we in this Chamber will very much welcome her experience and insight to the work we do here, particularly at this challenging time. I also pay tribute to her effective campaigning, having founded the APPG on Guantanamo Bay and chaired the APPG on Refugees when she was an MP. I am sure she is going to make valuable contributions to the work of this House as an enthusiastic and energetic colleague. Her voice will certainly be heard here, I am confident of that. It is a great pleasure to welcome her to these Benches; I wish her further success in the future and in her career in this House.
As we consider the Bill before us today, it is important to recognise the deeply egregious effects it seeks to remedy. The two-child limit is unjust and unfair and is a major driver of child poverty. It is discriminatory and hits hardest those who have the least and suffer the most, punishing children and setting siblings’ interests against one another within families. Some 25% of families affected are single parents with a child under three years old. Children of these families are doubly disadvantaged, having only one parent who is fully employed trying to make ends meet. Some 20% of all households affected by the two-child limit have at least one disabled child and 87,500 families affected lose around £3,500 per year.
Behind these figures, the reality of child poverty is about deprivation and misery. As a former teacher, I have seen it all too often: hungry children finding concentration in school impossible; teachers feeding the most desperate from their own pockets; parents missing meals so their children can eat; children and parents who have never known a holiday; the grinding anxiety and stress of trying to make meagre funds stretch even further and, quite honestly, just never having enough money. The humiliation and stigma of being poor compared to classmates and friends too often ends up in children being bullied in and out of school, for the old, cold and worn-out clothes that single out the poor or for not being able to go on school trips and visits or join sports and leisure clubs because your family simply cannot afford it. All this leads to a lack of confidence, feelings of inferiority and isolation, and subsequent poor attainment. It means that, by the age of 30, those who grew up poor are likely to be earning about 25% less than their peers. They are four times more likely to experience mental health problems, with growing consequences for worklessness and the benefits bill. They are more likely not to be in education, employment or training. I wonder whether the noble Baroness, Lady Stedman-Scott, thinks this is a route out of poverty; I certainly do not.
This pernicious policy was justified by the previous Government on the basis that it would make parents claiming benefits face the same financial choices as those supporting themselves through work. The argument was that the policy would achieve fairness. However, such evidence as there is points entirely to the contrary. No evidence has been produced to show that the policy has achieved its declared objectives. If the previous Government did not produce that evidence, I fail to see how those who were part of it can stand up and defend it.
Half the families who will benefit from the removal of the two-child limit, as the noble Baroness, Lady Sherlock, has said, were not on benefits when they had children, but catastrophes happen to families. People lose their jobs or become ill; families break up; people die or family members need extra care. This is why we have social security, as these misfortunes do not happen just to the poor; they happen to us all. Based on the arguments that the noble Baroness, Lady Stedman-Scott, has put, only a household wealthy enough to withstand all life’s disasters could responsibly decide to have more than two children.
It has been argued that the two-child limit will encourage families to increase their income by finding more work, but, for many, especially lone parents, the difficulty of finding affordable childcare means that they cannot increase working hours but need to make their meagre income go even further. All too often, it is their children who suffer. Expert institutions have attributed the rising tide of child poverty to the two-child limit policy. Some 59% of families affected by the two-child limit are in work, so, again, the false dichotomy between people having children on benefits and people at work does not stand up here.
Abolition of the two-child limit has been a common cause between many Members of this House and campaigners outside Parliament. I pay tribute to those who have worked to get this policy changed, and I very much hope the Bishop of Durham is listening, because he, too, was a key campaigner on this.
It is good to see that action is now being taken to remove this policy through the Bill, but there is still some way to go to eliminate child poverty, including the removal of the punitive benefit cap, which we hope will soon follow. A successful country invests in its children: the people who will deliver our nation’s future. Our country has failed to do this so far, and a record 4.5 million children are in poverty.
The Bill, though long overdue, is a welcome step forward for the nation’s children. We look forward to the full implementation of the Government’s child poverty strategy, and in this spirit, we are pleased to support the Bill.
The Lord Bishop of Leicester
My Lords, I warmly welcome the introduction of the Bill and the opportunity today to comment on it. I congratulate the noble Baroness, Lady Teather, on her truly excellent maiden speech, and I look forward to the maiden contributions of the noble Baroness, Lady Antrobus, and the noble Lord, Lord Walker, as well as of other noble Lords.
I count myself very fortunate to have never experienced true poverty myself, but I have spent much of my working life living in communities where poverty was very real—both the absolute poverty of one of the poorest nations in Africa, where I worked for several years, and the relative poverty of inner-city Sheffield, where I was vicar for a decade before becoming Bishop of Leicester.
I have seen first-hand, therefore, that poverty is not just about material resources but also has a much wider psychosocial impact. Amartya Sen argued that poverty should be understood not as low income but as capability deprivation: the lack of real freedom or opportunities to live a life one has reason to value. Martha Nussbaum expanded Sen’s framework by proposing a list of central human capabilities—such as life, bodily health, imagination, emotion, affiliation, play, and control over one’s environment—which all societies should secure for every citizen as a matter of justice.
Added to this is what some have called the poverty-shame nexus: the mutually reinforcing relationship between material hardship and the emotional experience of shame. People in poverty can experience shame through various mechanisms: social stigma, being judged as lazy, undeserving, or morally inferior; institutional interactions—for example, public services that treat people disrespectfully; or cultural norms that define success and worth in material terms. Research has found that people internalise stigmatising narratives about poverty and, as a result, have lower self-esteem and self-worth, and avoid social interaction with others.
Universal credit and its system of sanctions arguably institutionalise the poverty-shame nexus. Although I accept that its introduction in 2013 brought a necessary simplification to welfare payments, I nevertheless believe that the system of sanctions in particular has an implicit moralising message. Claimants must continually prove that they deserve support because they are both “poor enough” and “trying hard enough”. I have spoken with people who describe the feeling of being “presumed guilty until you are innocent”, on the assumption that every person looking for help might be “cheating the system”.
It is my belief that the two-child limit to universal credit has only added to the poverty-shame nexus. The assumption would appear to be that if you are on universal credit and have more than two children you are somehow not being responsible. Yet I have three wonderful children—I am sure that many other noble Lords also have more than two children—and I confess that I did not make a financial calculation ahead of deciding to have a third child. I wonder how many of us did. Surely, then, we have a duty to lift the sense of shame from others, not reinforce it.
Bishops on this Bench have consistently opposed the two-child limit right from its introduction. Indeed, as has already been mentioned, the former Bishop of Durham introduced a Private Member’s Bill seeking to abolish the limit in 2022. For us, this is part of a much wider calling to combat poverty in all its forms, addressing its causes and wider effects. I know that noble Lords on all sides of this House share that concern. Our differences are more to do with how, rather than whether, it is done. Yet I dare to hope that, once this policy is changed, we can work together to find other areas whereby those who are caught in poverty are enabled to contribute their gifts and skills to wider society.
Baroness Antrobus (Lab) (Maiden Speech)
My Lords, I thank you for the opportunity to make my maiden speech in this important debate on this universal credit Bill and the removal of the two-child benefit limit. This matter is personal to me. When I was 11 years old, state help in the form of child benefit became incredibly important to my single-parent household after my parents separated. My weekly trek to the post office to collect it—in cash, of course, in those days—helped us through a difficult period. Quite simply, it put food on our table. Mine was a middle-class family, and those who rely on support such as universal credit are not a static group, as has been said. Circumstances change: people face bereavement, job loss, or, as in my case, family breakdown. At moments of crisis, that support can be essential.
In fact, both my parents worked in this place as law reporters before the Law Lords moved to the Supreme Court. At no time did anybody imagine I would end up on these Benches. That I have joined the Labour Benches is probably less of a surprise. I have a proud heritage of Labour councillors from my grandparents’ generation, including the chair of Newton-le-Willows District Council, then part of Lancashire: my great uncle, Joe Noon. He taught me to play dominoes and to respect my Labour heritage, and he succeeded in both.
I also give heartfelt thanks to all the staff of the House, the clerks, officials, security and catering staff, and especially the doorkeepers, whose quiet professionalism sustains the dignity and daily functioning of this institution. I also thank Black Rod for his warm welcome and Garter for his guidance. I am deeply grateful to my noble friends Lady Royall of Blaisdon and Lord Coaker for introducing me, and to my noble friends Lady Smith of Basildon and Lord Kennedy of Southwark, not only for their generosity in time of support but for the confidence they placed in me.
I come to this House with a background that spans practice and theory, service and scholarship. For 20 years, I served in the Royal Air Force, including operational tours in the Middle East and Afghanistan, and in the Royal Navy. Those experiences shaped how I understand conflict—not as an abstract concept, but as something that has lifelong and often multigenerational impacts, both on combatants and civilians. Those conflicts still haunt me in many ways, but they also strengthen my determination to engage with politics in relation to defence and security. I wanted to walk towards that fight, not away from it, including standing as a candidate for the Labour Party in the 2015 general election, after I left the Air Force.
After 2015, I turned to academic research. I completed a doctorate examining the politics of air power between the wars in Whitehall. Some of the men who shaped the early Royal Air Force sat on these Benches. I studied their papers in the archives in Victoria Tower. I never imagined that I might one day follow them into the Chamber.
Indeed, 100 years ago, just this Tuesday, Lord Thomson of Cardington, the first Labour Secretary of State for Air and a subject of my research, spoke in an air policy debate in this House. With striking prescience, he warned that, should another European war occur, Britain’s ports and industrial centres would be exposed to devastating attack from the air and that the RAF would be central to national defence. Lord Thomson was tragically killed in the R101 airship disaster on its maiden flight in 1930. I hope that is not an omen for my maiden outing. However, the Oxford Dictionary of National Biography described him as a
“a clear and vigorous speaker, and his cheerfulness and good temper gained him many friends in the house”.
That seems an excellent example for me to at least aspire to follow.
My subsequent academic work has focused on contemporary warfare. I am co-director of the Freeman Air and Space Institute at King’s College London. I have written on many subjects, including organisational culture, air power, missile defence and deterrence in this increasingly dangerous and divided world. I commend my noble friend Lady Carberry on her speech in the International Women’s Day debate, when she highlighted continuing toxic behaviours in the Armed Forces—an issue that I have not and will not shy away from raising.
I began by explaining why the Bill has a personal resonance for me. It matters so much more for the 450,000 children it will lift out of poverty. I saw the impact of financial hardship on children while volunteering in food banks for four years.
To finish, some might wonder why a defence and security academic would choose this debate for her maiden speech. Yet the connection is clear: as we have seen time and again, global conflict and instability directly affect the cost of living. Defence, security and economic well-being are deeply intertwined. Britain’s ability to contribute to a more stable world depends on the credibility of our Armed Forces and the deterrence they provide. We are all affected by defence and security.
Your Lordships will have different perspectives and backgrounds from me. I am looking forward to working with and learning from you.
Baroness Lister of Burtersett (Lab)
My Lords, it is an honour to follow the wonderful maiden speech of my noble friend Lady Antrobus, which came from both the heart and the head—there is no better combination. As she said, she comes to your Lordships’ House with a background that spans practice and theory, service and scholarship. She is too modest to say just how eminent her record has been in all those spheres. Her speech demonstrates how valuable her contribution will be to the work of this House, at a time when conflict is engulfing so much of the world. I very much look forward to the wisdom that she will bring to debates on these matters.
My noble friend was also able to bring her personal experience of growing up in a single-parent family to bear on the subject of today’s debate. In doing so, she demonstrated the value of the knowledge that comes from lived experience—something that has helped to shape the Government’s child poverty strategy. She brought home very powerfully why it is wrong to suggest that the money spent on the abolition of the two-child limit would be better spent on defence, as the leader of the Opposition said recently. My noble friend’s speech made it clear how the security of the realm and the security of individuals in poverty are intertwined.
This brings me to the Bill. Let us rejoice as we read the death rites on what one eminent social policy professor described as the “worst social policy ever”. As we have heard, what UNICEF UK describes as a “transformative” measure will reduce both the numbers of children in poverty and the depths of poverty. As one mother responded, “Finally all my children will be seen as equals”. I pay tribute to those in government and in civil society who made sure it happened.
The Council of Europe Human Rights Commissioner recently observed that,
“without this step, it would be difficult to imagine an effective overall approach to combating child poverty. It is an important investment in the rights and wellbeing of children”.
He criticised the stigmatising preconceptions about people receiving social security that have marked some political and media reactions to the Bill. These reactions have suggested that somehow spending money on lifting children out of poverty is illegitimate—part of what is dismissed by the Opposition as the “ballooning benefits bill”. This ignores an estimated £50 billion a year hacked off that bill as a result of Tory cuts and restrictions, while official figures show that spending on working-age benefits as a percentage of GDP has not increased and is not projected to increase.
Arguments about the costs of the Bill also ignore, as we have heard, the cost of not acting, in terms of the impact of poverty on public services—notably, health, education and children’s care—and on future employment prospects. We are talking about preventive spending and investment in our children.
It is all too easy for the Opposition to hide their contribution to the worsening of child poverty behind the argument that the answer lies in paid work, full stop. This is despite the fact that, as we have heard, three-fifths of those hurt by the two-child limit have a parent in work and that an estimated 70% of the additional funding will go to that group. More fundamentally, there is a widespread consensus built on academic analysis that removal of the two-child limit is the one most effective measure open to the Government to reduce child poverty at a stroke. To quote CASE at the LSE,
“changes in parental employment, whilst important, will never deliver change to child poverty rates on the scale we need to see. We can only get significant and lasting reductions in child poverty by investing in our social security system. There really is no other way”.
Research by Public First suggests that, when provided with information about the cost-effectiveness of abolition of the limit in reducing child poverty, voters’ support for the measure increases significantly. The same is true of the overall benefit cap.
I am afraid that, here, I have to introduce a note of dissent, which I am sure will not surprise the Minister. It echoes the powerful maiden speech from the noble Baroness, Lady Teather. The Bill’s impact assessment estimates that in 2029-30 around 50,000 households will not gain and 10,000 will only partially gain because of the cap. I find it depressing that the same arguments are used about needing the cap to ensure work incentives as under the previous Government. Yes, the cap may push some parents into paid work, but by driving parents into deep poverty it creates stress and anxiety about making ends meet that makes them less effective jobseekers. This is not, as Ministers assert, in the best interests of children. Indeed, I remind my noble friend that, when the cap was introduced, the official Opposition supported the removal of child benefit from the cap on the grounds that it is received by equivalent working families and that, therefore, in order to create a more level playing field, it should not be included in the cap. Could this be looked at again, please, from the perspective of the best interests of children?
I also urge that, when the threshold limits are reviewed next year, a decision is made to uprate them annually in line with the UC standard allowance, so that we do not see more families pushed into deep poverty by the cap each year. As it is, they have been uprated only once since 2016, when they were cut. They are now worth £5,409 less in London and £4,702 elsewhere as a result.
Two other concerns have been raised about some families who will not benefit or fully benefit from the Bill. The first, raised by CPAG, of which I am honorary president, and Advice NI, relates to some families who, having migrated to UC through the managed migration process, may lose some of their transitional protection. The other, raised by Resolve Poverty, concerns families who may lose as a result of the knock-on effect on their council tax reduction. I do not think that either is mentioned in the impact assessment and I wonder whether my noble friend can throw any light on the numbers likely to be involved.
To return to the good news, the Bill will, in the words of a mother of four quoted by CPAG,
“make a world of difference”.
As the cornerstone of the first UK-wide child poverty strategy since 2010, it symbolises what a Labour Government can do to build a good society.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank the noble Baroness, Lady Sherlock, for introducing this Bill. Her passion for this policy is evident and I am sure that she is very glad finally to bring it to us 615 days after the current Government took power. The Green Party called for the end of the two-child benefit cap during the 2024 election and has continued to do so subsequently.
As the noble Baroness said, this policy was introduced by the Cameron-Osborne Conservative Government in 2017, deliberately choosing to put children into poverty—children who had done nothing to deserve that situation. It was a cruel policy and it is very good news that it is finally going. I offer congratulations to the many campaigners who have worked for this day, including Labour Back-Benchers in the other place. It is a great pleasure to follow the noble Baroness, Lady Lister, who, I have no doubt, has been working very hard on this and rightly identified where the Government urgently need to go further, which is where I will particularly focus.
This is a missed opportunity, as it fails to act on the household benefit cap. According to Z2K, the charity that aims to fight poverty, at least 150,000 children in larger families will see no benefit at all because they are subject to that separate benefit cap. The household benefit cap means that many larger families will be trapped in deep poverty. In a case study cited by Z2K, Maryam is a lone parent of three who fled domestic abuse and now relies on universal credit. She has been affected by the two-child benefit limit and the benefit cap and is left with just £25 a week for the family to live on after rent. Even with today’s Bill, her income will not increase at all. If the benefit cap was lifted alongside it, it would allow her to meet her basic living costs and escape severe destitution.
There are also the families affected by disability. The Government’s child poverty strategy highlights that children living in families where a household member is disabled are at particularly high risk of both poverty and deep material poverty. Yet, under the changes in the universal credit legislation, financial support for seriously ill and disabled people under universal credit will be reduced by £215 a month. For a disabled family with three children affected by this, that universal credit change will wipe out 62% of the benefits from the two-child limit abolition. Policy in Practice, which did some very valuable work, found that one in 10 households currently held back by the two-child limit will not gain at all when the policy is reversed and one in 10 families will see only part of their potential gain as they become benefit-capped through the policy.
I am citing those figures, and I am sure others will come up with other figures, because there are no official figures on this. In fact, I asked the Minister in a Written Question in December for the Government’s figures on how many families who would have had money from the end of the two-child benefit cap would be hit by the household benefit cap. The Answer that I got on 5 January was:
“The requested information is internal analysis that is being quality assured to official statistics level. Plans to publish this in due course are ongoing”.
I wonder whether the noble Baroness can tell me how that is going.
Looking at the overall situation, the Institute for Fiscal Studies estimates that, without further policy action, child poverty rates will have crept back close to the 2024-25 level by the end of the forecast period in 2029-30, leaving a change of just 0.4% in those poverty levels. Another thing aside from the overall benefit cap is the local housing allowance, which is currently wildly inadequate.
I have two final brief points. I welcome the three maiden speakers today and look forward to those from whom we have not yet heard. They are obviously interested in child poverty but I urge them to think about branching out, as they find their feet in this House, into other areas that impact it. I spoke yesterday in the Moses Room about financial regulation. That is crucial to child poverty and a threat to the security of us all. Please think about engaging; do not just leave it to the banking insiders but pick up issues such as that as well.
Finally, to respond directly to the noble Baroness, Lady Stedman-Scott, I am slightly surprised that, as the Conservatives are very into history, their leader has not really looked into the history books on the Boer War. British society and this place became very concerned that poverty, poor diet and poor housing meant that young men were not fit to fight for Britain, because of child poverty. If you are going to recruit 20,000 more soldiers, how will you do it from a society blighted by child poverty?
Lord Babudu (Lab)
My Lords, I look forward to hearing the remaining maiden speech, from my fellow newcomer and noble friend Lord Walker of Broxton. I congratulate the noble Baronesses who have delivered excellent maiden speeches already. Before I get to the substance of my contribution, I declare an interest as the executive director of Impact on Urban Health, part of an endowed foundation that funds organisations that have contributed to the Government’s child poverty strategy, including Child Poverty Action Group and Changing Realities.
In preparing for this debate, I was heartened to read of the extent of cross-party consensus on the need to address child poverty. Given how it has risen over the past 14 years, we must be clear that the current approach is not working. Building on contributions from other noble Lords, I will speak briefly about how people come to be on universal credit and run up against the two-child limit, who ends up in that situation and what it costs.
First, on how it happens, as we have heard, around half of those affected by the two-child limit were not on universal credit when they had their children. This is a circumstance that can befall so many of us—a break-up with a spouse, the loss of a job or a worsening of health. These are routes to universal credit for so many. Who ends up running against the two-child limit? It is women, in large part. Of the 450,000 households affected, more than half are headed by single mothers and only around 6,000 by single fathers. Black and ethnic-minority households are up to three times more likely to be affected than white households and 40% of affected households have a parent with a disability. The approach we are taking disproportionately affects women, ethnic minorities and people with disabilities.
What does it cost? We have heard from other contributions that the proposed changes will have a cost of around £3 billion a year, in the end. That is a lot of money by any means, but, stepping back, what is the broader cost of letting this limit stand? Extensive research by Child Poverty Action Group, the Joseph Rowntree Foundation and the Department for Work and Pensions has shown that those affected are more likely to experience poor physical and mental health and less likely to be in employment, education or training or to earn a decent wage in the long run. In several ways, this limit costs people the opportunity to live in good health, to earn well and to contribute to society. We are losing tax contributions and well-being.
I am incredibly sympathetic to the need to control our welfare bill. I sat on the Commission for Healthier Working Lives because I believe that work plays a hugely important part in enabling people to live well. But we must not forget that the majority of those affected by the two-child limit are already in working households. In due course, I will speak to the changes I believe we need in welfare more broadly, but today I want to be clear about one thing: this is not the way to build a healthier society or to save money. It ultimately costs us money. We know that we do not want children to live in poverty and that it is scarring their lives.
We have this opportunity. Removing the two-child limit is simply the most effective way to achieve meaningful progress on reducing child poverty. Other approaches have not been working since the limit was introduced and with the opportunity to achieve the biggest reduction in child poverty within any single Parliament, I urge noble Lords to signal their support for His Majesty’s Government and grasp this opportunity with both hands.
Lord Walker of Broxton (Lab) (Maiden Speech)
My Lords, it was once pointed out to me that this place was designed to intimidate and I am indeed terrified right now, especially given the fabulous maiden speeches before me. That could not be more at odds with the kind and helpful welcome that I have received from every corner of this House—Black Rod, the clerks and officials, the doorkeepers, the catering staff, the police, and my gracious supporters and noble friends Lady Smith and Lord Blunkett. In fact, the cordiality of noble Lords who I have met on all sides of this Chamber has been lovely. I hear the vibe in the other place is somewhat different, so thank goodness I failed to obtain a seat there. In fact, it has been quite an unexpected and circuitous route for me to be standing here today, but here I am and I intend to contribute to the very best of my abilities.
I never met either of my granddads. They both worked hard down coal mines and died too young. My mum and dad met at school in West Yorkshire. Given their backgrounds, they knew all about graft. They tried no end of things to better themselves, from peddling strawberries on a Welsh roadside to running a late-night fish and chip shop and sending out chain letters, all before landing on the idea in November 1970 of selling loose frozen food from a tiny shop in Oswestry. Dad worked the stock and Mum the checkout. He wanted to call the business Penguin; fortunately, Mum won that debate and Iceland was born. As a kid, I had the privilege of being able to sit around the dinner table and listen to their conversations about what it takes to build something brick by brick—the highs and the lows, and the need for persistence and resilience. I promised myself that I would make the very most of what good fortune I had been dealt.
That resolve has carried me to the summit of Everest. It has helped raise large amounts for charity and driven me to campaign on many environmental and social issues from palm oil to plastics, from infant formula to ethical credit. When making my own way in the world, I was adamant about one thing: I did not want to sell frozen peas for a living. Instead, I qualified as a chartered surveyor before moving to Poland, starting a property company and becoming the entrepreneur I had always dreamed of. We made many mistakes, somehow survived the great financial crash, and today my firm Bywater is the leading low-carbon mass timber developer in the UK.
Joining the family firm was never really on the cards, but when my dear mum was diagnosed with early onset Alzheimer’s, I realised that my own time might be limited and I wanted to protect the amazing legacy she had created with Dad. I can tell you that high-volume, low-priced food retailing is a bit different to collecting rents. It is cutthroat and all about value. I hope the value that I can bring to this place is some high-street realism, shining a light on what I have learnt as a retailer and an entrepreneur, amplifying the voices not just of business but also of the millions of weekly customers that we serve across 1,000 communities around the UK.
In many ways, Iceland is a barometer of Britain and, right now, those communities are struggling. The cost of living crisis means the basic affordability of everyday items is out of reach for many. That is why in my new role as Cost of Living Champion to the Prime Minister I will be relentless in pursuing outside ideas and fresh thinking, and asking uncomfortable questions.
Recent events in the Middle East have made this both more important and more challenging than ever. But I like a challenge, so I am pushing No. 10 to use its emergency powers to protect consumers from opportunistic rip-offs by convening a weekly COBRA-style committee of regulators to act in real time to protect consumers. I want to bring in the energy companies and petrol retailers to hold them to account.
As well as affordability, poverty comes from a feeling that you cannot access basic services—a sense of an unequal system creating financial injustice and of Westminster politicians not listening. To cite the economist Amartya Sen for the second time in this debate, it is about a lack of the agency to develop all of one’s potentialities. The only way we can tackle this is through collaboration between business and government. Business needs to act with the utmost kindness, respect and obligation to all its stakeholders, not just its shareholders. On the flip side, government needs to remember well that it is only private enterprise that generates the wealth our nation so desperately needs to fund public services, and to spend that money wisely.
Speaking of which, that little shop I mentioned in Oswestry was started with a £30 loan from my grandma. It grew into what is today the biggest business in Wales, which, in the last 20 years alone, has proudly contributed more than £1.3 billion to the UK Treasury. I directly thank our team of 30,000 amazing Icelanders for making that possible. Shopkeeping is tough, but it is noble.
I turn to the topic of the debate. We see the impact of poverty in our stores every day as customers struggle to put food on the table to feed their families. We have taken up many initiatives of our own to try to help, from boosting Healthy Start vouchers to creating interest-free microcredit schemes which prevent the most vulnerable from falling into the hands of predatory loan sharks. We have also led many successful campaigns, such as making infant formula more affordable or becoming the biggest recruiter of ex-offenders in the UK, which is good for society, business and the economy.
Ultimately, there is a limit to what any business can do, so I am delighted to support this Government’s actions to lift hundreds of thousands of children out of poverty by removing the two-child cap. Socially, morally and fiscally, it is undoubtedly the right thing to do. Alongside this targeted intervention, remembering that a Government’s responsibility is to spend wisely, we must also reattain our fiscal prudence with our country’s welfare spending. I support the Labour Party, not the benefits party. It should strive to provide a safety net for those in real need, not those making a lifestyle choice. In particular, we must prioritise getting many more of our young people out of the NEET cul-de-sac and back to participating in society; otherwise, we are complicit in destroying their life chances. Acting on this is also a moral obligation.
I conclude by paying special thanks to my own family: my irrepressible dad, who has supported me at every turn, and my mum, who I know is looking down from the gallery in the sky today. Finally, I thank my two daughters, and my wife, Rebecca. She is the kindest, strongest, most beautiful person I know. I thank her for putting up with me. I hope that noble Lords will enjoy putting up with me too.
Lord Bird (CB)
I say “well done” to the noble Lord, Lord Walker. I was confused when I was asked to follow the noble Lord and, in the tradition of the House, to praise him. I thought to myself, “I don’t know anything about Walkers crisps”. That was the only Walker I knew. Then I thought, “Ah no, it is Johnnie Walker”. For a while I was confused, but I got there in the end.
What really excites me about what the noble Lord is doing, as well as putting a lot of people into work, is the idea that he extended the hand to people who had been banged up. He has given jobs to people who were in prison. I am glad that the noble Lord is in competition with Timpson. I think, in a way, he is a bit ahead of it and maybe it is going to have to catch up. It is a good bit of competition. The only problem I have with the noble Lord—and I really do have a problem—is: where was he when I needed him? I remind noble Lords that I am an ex-offender.
I turn to the Bill. What a wonderful Bill, to get rid of something like this. We may like it or not; we may or may not be with the noble Baroness, Lady Stedman-Scott, wanting to give hand ups rather than handouts. I have to say that the noble Baroness stole that from me; she knows that. I was the first person in the United Kingdom to use those terms, and I stole them from Bill Clinton, who stole them from Jesse Jackson. Is that not interesting? Is it not wonderful that we can talk about a hand up, not a handout? The whole of my working life, since starting the Big Issue 34 years ago, has been about giving people a hand up, not a handout.
My mother had six children. Every year that she had a baby, she got poorer—and poorer and poorer. Big families are not good for the bottom line. They are not good for you. But the problem with this Bill, and where I fall out with our Conservative friends, is that while it may punish mum and dad, it really punishes the children. To me, if we need anything in life today, it is to be behind our children. Our children are being undone before us: mobile phones and social media are undermining them. Our children are really at the sharp end of things.
I come from the pre-social security period. We were brought up with very little help from the state—in the 1950s and 1960s, there was none of that. We got five shillings per child: that was about one pound and 10 shillings for a family of six boys. Because Britain is a low-wage and low-investment economy, British capitalism is really good at making slithers of money out of jobs that are low-paid. It is very difficult now for a lot of people to nobly go out to work and earn enough money to feed themselves and their children, even though they are doing a 40-hour week. We are a low-wage economy because we are a low-investment economy.
Capitalism is quite happy with that. It does not matter if you make millions of pounds out of slithers of profit, or whether you buy and sell things that are worth £50,000 each. This is the thing that I came into the House of Lords to try to sort out: I came in to dismantle poverty, not to make the poor more comfortable, nor to keep them outside as though they were a different species. I have listened to the debate so far. I am not sentimentally attached to the poor; I do not cry over them. I think there are too many people who cry over the poor and who do not do anything. I want to get the poor out of poverty. I want to get the poor into a situation where they can make decisions about their own lives, where they can have the kind of life that they want, where they can get rich and socially mobile and get out of poverty. There is only one cure for poverty and it is not the state. The only cure is social mobility. If you get social mobility, you are out of it.
The funny thing is that most people in Britain, even Conservatives, will be a few generations away from the coalface. They will have morphed their way to better times. The problem is the inheritance of poverty—for example, 90% of the people I have worked with in prisons and on the streets come from poverty inherited from their parents. Until we work on that, we will not get anywhere.
Lord Watson of Invergowrie (Lab)
My Lords, it is common for noble Lords to start their speeches by saying that it is a pleasure to follow either a noble Lord or a noble Baroness, and that is generally true. There are certain circumstances when it is not true. A number of speakers in this House are just so impressive, often speaking without any notes, that it is a very daunting prospect to follow them—and the noble Lord, Lord Bird, is undoubtedly one of them.
I pay tribute to my new noble friends Lady Antrobus and Lord Walker and the noble Baroness, Lady Teather, all of whom made speeches of quality, with a passion and fluidity that show that they will make major contributions to your Lordships’ House in the months and years to come.
Turning to the Bill, I am very pleased that we have got to where we are today on the removal of the two-child limit, but I cannot disguise my regret that it took so long. Be that as it may, as of next month, the two-child limit will no longer apply. In a typically powerful opening speech, my noble friend the Minister highlighted how many children will be taken out of poverty by the final year of this parliamentary term. Add in the introduction of breakfast clubs and the extension of free school meals, and that figure will rise beyond half a million. Even more impressive is that all that is before the Government’s child poverty strategy properly gets under way—a 10-year plan aimed at delivering a lasting reduction in child poverty by tackling its structural causes.
The noble Baroness, Lady Stedman-Scott, spoke about the value of work, but during her party’s time in government, it completely failed to ensure that parents in work could keep up with the cost of living. In the Tories’ last year in office, 3.2 million children in working families were in poverty—up from 2.1 million when they came to power in 2010. More than any other policy, the two-child limit introduced in 2016 was responsible for driving child poverty to its current record high. To be honest, we should not be too surprised, because one of the last acts of the Labour Government who demitted office in 2010 was the Child Poverty Act, part of which was to establish a child poverty commission to tackle structural issues around child poverty. It took the incoming Tory and Lib Dem Government two years to introduce it, but they called it the Social Mobility and Child Poverty Commission. As the noble Lord, Lord Bird said, social mobility is of course very important, but the focus was meant to be on child poverty, and it had that name. Four years later, “Child Poverty” was dropped and it became the Social Mobility Commission. I think that reflected the fact that child poverty simply was not a priority for that Government and subsequent Tory Governments.
More than 60 children’s charities and other campaigning groups have welcomed the Bill. Tellingly, only right-wing organisations such as the Institute for Public Policy Research, the Centre for Social Justice and the self-styled TaxPayers’ Alliance—I am a taxpayer, but it certainly does not speak for me—have questioned the repeal of the two-child limit. Often, arguments in favour of retaining the two-child limit are couched in language such as a “benefits bonanza” or “welfare junkies”, appallingly pejorative terms that demean many people who are in receipt of state support while in employment, doing jobs where their pay is so low or unpredictable that they need extra help just to survive.
I say to my noble friend the Minister, with whom I worked on the shadow education team and for whom I have huge respect, how much I welcomed her use of the term “social security” in her speech. Can we please ditch the terms “welfare” and “benefits” and put “social security”, the description that we used to use, in their place? That is exactly what state support for families living with poverty is. Why should we not use the proper term? We can find a term that is not demeaning or in any way pejorative to people in need of help.
At Second Reading in another place, the shadow Secretary of State for Work and Pensions questioned the affordability of the repeal of this legislation, something that has been repeated today. I would flip that coin and ask: what about the affordability of not ending the limit, which my noble friend Lady Lister called preventive spending? Can the cost of lower educational attainment, poorer mental health and a much higher likelihood of being NEET ever be tolerated? Shamefully, I have to say that during the 14 years of Tory and the Tory-Lib Dem Governments, it too often was. We can say that it will not be tolerated any longer, because this Government are developing the child poverty strategy to which I referred earlier. That will result in children receiving the social security and social solidarity that they deserve and having better health and education outcomes, enabling more of them to build careers that will provide stable lives for families of their own. That will be the hugely beneficial outcome of this Bill, which is in itself hugely welcome.
Baroness Dacres of Lewisham (Lab)
My Lords, before I begin my substantive contribution to this debate, I want to pay tribute to those who have made their maiden speeches this afternoon. It has been wonderful to learn so much more about each of them and inspiring to hear them.
This Bill represents one of the clearest and most immediate steps we can take to reduce child poverty in this Parliament. Few policies in recent years have had such a direct and concentrated impact on larger families as the two-child limit. Its removal is therefore not just symbolic; it is practical, targeted and necessary. Around 470,000 households are affected by the two-child limit, impacting between 1.6 million and 1.7 million children. Six in 10 of those households include at least one adult in work. These are working families, as many have mentioned this afternoon. The parents rise early, commute long distances, juggle childcare and shifts, and contribute daily to our economy and our communities. Yet despite those efforts, many remain in poverty. That is a reality of in-work poverty today.
Families lose around £3,400 for each third or subsequent child not covered by the child element. For households already balancing tight budgets, that loss is not abstract; it means difficult trade-offs between heating and eating, falling behind on rent or relying on food banks. Behind every statistic is a family trying to provide stability and reassurance to children while quietly carrying the financial strain. The Joseph Rowntree Foundation has consistently identified the two-child limit as a key structural driver of rising poverty among larger families. Its research shows that children in families with three or more children now face poverty rates exceeding 40% after household costs. Poverty among larger families has risen markedly since the introduction of this policy, widening inequality between children based purely on their family size.
Joseph Rowntree Foundation modelling demonstrates that removing the two-child limit would significantly improve living standards for the lowest-income households. Scrapping the limit would more than halve the projected real-terms decline in income for the poorest third of households compared with retaining it. Government analysis similarly indicates that hundreds of thousands of children would be lifted out of relative poverty.
The Bill also sits within a broader effort to support families and strengthen living standards. It complements the expansion of free breakfast clubs, saving parents up to £450 a year, and the extension of free school meals to all children of households on universal credit, benefiting half a million more pupils. That broader approach matters because poverty is rarely the result of one single factor; it is shaped by wages, housing costs, food prices, childcare pressures and access to opportunity. Addressing it therefore requires income support and practical support, nutritious food at the start of the school day, predictable childcare that enables parents to work, and a social security system that reflects the real cost of living.
The heart of this legislation affirms a simple but vital principle that no child’s opportunity should be limited by the number of siblings they have, and that working families deserve stability, dignity and fairness. The measures before us today will not solve every challenge faced by families, but they will make a real difference to the lives of many children across this country—a responsibility worthy of this House. For those reasons, I support the Bill.
Baroness Shah (Lab)
My Lords, I start by congratulating my noble friends Lady Antrobus and Lord Walker of Broxton, and the noble Baroness, Lady Teather—it is always great to see a member of the Brent family on the Benches—on their brilliant maiden speeches. I am grateful for the opportunity to speak at Second Reading. The two-child limit was introduced by the Conservative Government in 2017 and its consequences for child poverty were felt immediately. On taking office, the Labour Government inherited an economy in a fragile state and have worked deliberately and responsibly to create the conditions in which bold action on child poverty could be taken. The Bill is the result of a Government who have prioritised why they came into power.
Let us be clear about what this policy has done to families across our country. The Child Poverty Action Group has described it plainly. This is a “tax on siblings”. It severs the fundamental
“link between what children need and the support they receive”.
Government data in July 2025 shows that more than 1.6 million children live in households affected by the limit—that is one in nine children in England, Scotland and Wales. That number grows every year. The Joseph Rowntree Foundation’s UK Poverty 2026 report is sobering. For 2023-24, it showed 4.5 million children living in poverty in the United Kingdom. That is a scandal. The Bill is a vital first step, not the last.
The case for this Bill is not just economic; it is educational. Children growing up in poverty already start behind their peers, and the gap widens every year. The Education Endowment Foundation has found that pupils eligible for free school meals are, on average, 18 months behind their classmates by the time they sit their GCSEs. The Social Mobility Commission has shown that children from the poorest households are significantly less likely to achieve the grades needed to access higher education or skilled employment. Poverty does not merely limit what children can afford; it limits what they could become. When we remove the two-child limit, we are not simply putting money into households; we are unlocking potential that this country cannot afford to waste.
For children growing up in households affected by the two-child limit, the barriers begin long before the school gates. Families are unable to afford school uniforms, school trips and even basic stationery—the small things that determine whether a child feels that they belong. Teachers report children arriving hungry and unable to concentrate. The Institute for Fiscal Studies has found that a 10% rise in family income during childhood leads to measurable improvements in educational attainment and earnings in later life. In other words, poverty is not a temporary inconvenience; it is a force that shapes a child’s trajectory for decades. The Bill is an investment in the education of future generations. The IFS, the Resolution Foundation, the Joseph Rowntree Foundation and CPAG alike all say that lifting the limit is the single most cost-effective lever the Government can pull to reduce child poverty.
Then, there is the so-called rape clause, which requires women to prove non-consensual conception in order to secure exemption for a third or subsequent child. It is degrading, traumatising and utterly incompatible with a just society, and I am proud that this Bill will consign it to history.
The Bill before us is not a merely a policy change; it is a moral statement. It says that we will not hold children responsible for the circumstances of their birth. The Resolution Foundation puts the figure as high as 500,000 children lifted out of poverty when the two-child limit’s removal is combined with expansion of free school meals. CPAG has estimated that the long-term cost to society of entrenched child poverty stands at £39 billion a year in lost tax revenue and increased demand on public services. We spend more managing the consequences of child poverty than it would cost to prevent it.
The Bill does not stand alone; it is the centrepiece of the most ambitious child poverty strategy in a generation. Taken together with measures in the Government’s child poverty strategy, these are not tinkering at the edges. This is structural change, addressing the root causes of poverty that has been allowed to deepen over the last 14 years of austerity. This is a rare moment of consensus across major research and advocacy organisations throughout this country. Ending the two-child limit is the single most cost-effective action this Government can take. The moral case is unanswerable, and the time has come. I end by quoting Cicero:
“What society does to its children, so will its children do to society”.
Lord Redwood (Con)
My Lords, I congratulate our maiden speech-makers today and join in the general welcome to them. I draw from the noble Lord, Lord Walker, a very wise remark when he reminded our governing party that it is indeed the Labour Party, not the “Benefits Party”. While I think that all of us here share the passion and the ambition to lift families out of poverty and to make sure that children can have fulfilling lives, in the strong words of the Minister, I think it is more difficult than just making a modest extension in benefit provision for certain families in our society. If only it were that easy, I am sure parties would have done it a long time ago. What we are embarking on, surely, is a very ambitious programme which is trying to help, without interfering unnecessarily, all those families in which the children do not get that right opportunity.
Some children in poor families are let down because there is simply a lack of money. They have loving parents, and if there were a bit more money, they would not have to make such invidious choices about meals and support for the children at school, and trips and outings. Others are let down by adults in their lives who control them, abusing them or spending the money on too much alcohol and drugs, and not concentrating on providing them with the stable financial background they need. Some children are born into families in which there may be plenty of money or too little money, but they lack those other important things. They lack love. They lack support. They lack ambition for the children. They do not provide the guidance that good parents and good grandparents try to provide.
The state cannot be everybody’s parent, nor do we want it to be. The state wisely says that the Government, or a local authority, will intervene and pre-empt the parents only in extreme cases. We are talking about influencing, encouraging and supporting the parents. That can be done by many of us. Everyone here has been on a remarkable journey in their lives to date. Many have overcome considerable difficulties, from background, resistance or opposition, and have achieved great things already, so the more we can get out and talk and engage and encourage, the more it is possible that we can turn on a light in young minds and that they can see that something is possible that the adults around them have not told them about. Or maybe we can enthuse their teachers, who need to put ambition into their lives. There is nothing wrong with ambition; it can be a force for good, and it is releasing children from poor backgrounds if we can communicate to them that maybe they can achieve great things too.
The noble Lord, Lord Bird, said it very well in his remarks on social mobility. But of course, we are interested only in one-way mobility: we want people to be able to move up. We are not so keen on people moving down, and we try to cushion or help if they move down too quickly. The more people we promote, the more people fall below the average; that is the way arithmetic works, but we want to live in a more prosperous society. There will always be people who are relatively worse off, but if it is around a much higher average living standard, then there will be so much more happiness in the world around us.
I say to the Government, given our shared ambitions to get more people out of poverty and give more encouragement to young people, that there are many other things than this Bill that they could or should be doing. The first thing is that it has to be much easier to get a job. Unfortunately, over the last 18 months, there has been a big rise in unemployment, and the combination of high taxes on jobs and on those businesses that need premises in our high streets—the shops and the entertainment and leisure businesses—has contracted the number of job opportunities. This will make it much more difficult for the Government to fulfil their ambitions, because this cannot be done without the good will and success of the entrepreneurs, as represented so ably here today by the noble Lord, Lord Walker.
The strand in Labour which is about the promotion of work and better working conditions is wholly admirable. Whenever I have been fortunate enough to run larger enterprises or be involved in their management, I have always been very encouraging of that strand in Labour. I have wanted people to be better paid, but it must be through bonuses or working smarter, so that the company can serve the public well without going bust. I have always wanted people to see that there is the chance of promotion. Most of us started with jobs we did not really want to do and had to work our way up. That is what ambition is all about.
The Government must think of a much bigger, bolder strategy. Paying extra benefits is not going to do it.
Lord Davies of Brixton (Lab)
I welcome strongly the Government’s decision to abolish the two-child limit. Scrapping it remains the single most effective step that we are taking to reduce child poverty in this country.
As we have heard, abolishing the policy will lift about 450,000 children out of poverty by 2030. When combined with the other measures in the Government’s child poverty strategy, this could lift more than half a million children out of poverty by the end of the decade. This is something that we should be celebrating and shouting from the rooftops. It is an incredible achievement and one of which the Government can be proud.
This is not an abstract statistic. It represents hundreds of thousands of individual children who will grow up with better security, better health and improved opportunities. One noble Lord has asked how the Government can justify the expense and mentioned the £3 billion figure. Quoting the £3 billion figure ignores the costs of child poverty—the poorer health outcomes, the lower educational attainment, the greater pressure on public services and the lost economic potential. Put together, that is an estimated £39 billion. The £3 billion saves the country as a whole £39 billion. How can we not wish to pursue that policy? It is not reckless spending. It is highly targeted and cost-effective, with serious and substantial long-term benefits.
Others have argued that taxpayers should not be expected to support larger families. Many of the comments of the noble Baroness, Lady Stedman-Scott, were about large families. The reality is that, now, only a limited proportion of families have four or more children. Of those families, the great majority are working hard to provide for them. Those who are unable to get jobs are still not to be dismissed as the feckless poor—that is the narrative which is always produced to try to prevent decent human services. The two-child limit has no measurable impact on family planning or the fertility rate.
Every child is to be celebrated and cherished, regardless of their birth order. They deserve enough food, a safe home and a fair start in life. When children are supported to thrive, they do better in school, remain healthier and contribute more fully as adults. That benefits not only those families but all of us—society as a whole. It is important—I think the point needs to be made to the noble Baroness, Lady Stedman-Scott—to note that this is not only about families out of work. As other speakers have explained, the majority of those who are caught by the current policy and will benefit in future are families who are in work.
Unfortunately, I am going to join my noble friend Lady Lister of Burtersett and raise the issue of the benefit cap. I do not think this policy will achieve all its objectives unless and until we remove the benefit cap. It was introduced by the coalition Government and it continues to place immense pressure on many families. I should have started by paying testimony to and welcoming the excellent maiden speeches that we have heard today, but it is worth mentioning that the noble Baroness, Lady Teather, can claim credit for opposing the introduction of the benefit cap when she was in government. I am sorry she is not here, but I acknowledge her important contribution to this debate.
To conclude, if we are serious about tackling structural poverty, we cannot remove one barrier, that of the two-child cap, while leaving another firmly in place. Lifting the benefit cap would complement the abolition of the two-child limit and ensure that the gains we make today are not undermined by other restrictions that fail to reflect the rise in the cost of living.
Lord Sikka (Lab)
My Lords, I support this Bill, though I am disappointed that some oppose lifting people out of poverty while constantly supporting greater spending on the welfare of corporations and the super-rich.
Eradication of child poverty could boost the UK economy by around £40 billion a year. Children in poverty struggle to realise their full education and employment potential, which leads to lower earnings and contributions to the public purse. They are more likely to have healthcare problems, make greater demands on public services throughout their lives and have shorter life expectancy. Lifting children out of poverty makes perfect economic and moral sense.
The £3 billion expenditure will boost the spending power of the poorest families and stimulate local economies. The real cost to the public purse would be much less, because it would, in large part, return to the Government in the form of VAT, other indirect taxes and lower demand on public services. The Opposition can support redistribution of income and wealth by, for example, calling for alignment of the taxation of capital gains with wages, which would raise £14 billion. There would be plenty there to cover the costs of this measure, but they do not actually call for redistribution.
I am concerned that thousands of children will not receive any improvement from this Bill because of the overall benefit limit, which is set at around £22,020 a year for most families and £14,753 for single adult households. Some 119,000 households have their universal credit capped and 82% of benefit-capped households include children. Can the Minister explain the impact of the overall benefit cap on child poverty and its relationship with the Government’s strategy for reducing or eradicating child poverty?
Child poverty is linked with parental poverty, so we need a strategy for that. The median gross wage of a UK employee is £31,056, or £25,880 after income tax and national insurance. Graduates take home even less. Inevitably, 14.2 million people live in poverty, and 25.3 million people live below minimum income standards. In other words, they lack the income to meet material needs and to enable participation in society. This comprises 48.6% of children and 35% of working-age adults. Some 81.6% of children in lone-parent families are growing up in households with inadequate incomes.
Those who oppose the Bill should be reminded of the horrific consequences. For example, the UK has a higher rate of infant mortality compared with peer countries, because many women cannot afford good nourishment, not only before but also during pregnancy. Due to poor food and living conditions, British five year-olds are up to seven centimetres shorter than children of the same age in Europe. One in four young people in England has a mental health condition, and illnesses such as rickets and scurvy have returned. Altogether, some 7 million children are growing up in households which lack the income needed for a dignified standard of living. So, there is a clear need for an effective strategy for parental poverty eradication.
Trickle-down economics has long failed. Average real wage has hardly moved since 2008; workers have no say in how wealth generated by their brain and brawn is to be shared; there are no curbs on profiteering; some 3 million people are malnourished or are at risk of malnutrition; and the poorest 20% pay a higher proportion of their income in taxes than the richest 20%. Due to the visible hand of successive Governments, the bottom 50% of the population has less than 5% of the wealth, and the bottom 20% has only 0.5%. Such an environment cannot banish child poverty. So can the Minister say something about how the Government are going to develop a comprehensive strategy for the eradication of parental poverty?
Lord John of Southwark (Lab)
My Lords, as an old-timer in this place, I congratulate my noble friends Lady Antrobus and Lord Walker, and the noble Baroness, Lady Teather, on their brilliant, inspiring and moving maiden speeches.
A Labour Government are about nothing if they are not about reducing poverty and inequality in our society: breaking down the barriers that separate rich and poor and opening opportunities to all, whatever our background. That is why I am so pleased to be speaking in this debate and in support of the Bill, which sees the Labour Government removing the two-child limit on universal credit. I am pleased that it is just one part of the Government’s comprehensive child poverty strategy, which aims to lift 550,000 children out of poverty by the end of this Parliament.
The noble Baroness, Lady Stedman-Scott, said there was a fundamental question in this debate. I say the fundamental question is why we have so many children living in poverty in this country. It is shocking that in 2026, in the world’s sixth-largest economy, around 4.5 million children live in relative poverty. It is even more shocking to consider than in 2010, at the time of the last Labour Government, that number was 2.3 million, having fallen from 4 million in 1997—figures I took from a paper prepared by the noble Baroness, Lady Teather. Our own national history shows us that child poverty can be tackled in a meaningful way if the Government of the day are willing to act. Those who oppose the Bill today are on the wrong side of history.
However, even if the Government’s objectives in this Bill and other measures are achieved, we must acknowledge that we will still have a long way to go. The scale of the challenge now makes the task of acting all the more urgent and necessary. A family of four, two adults and two children, living in relative poverty, is, according to statistics I have read, getting by on no more than about £400 a week. That is £400 to pay for heating, electricity, travel, food, clothing and all the costs that any family incurs before you consider anything that might be considered a treat. I need hardly remind noble Lords that that is a figure which is little more than the daily allowance which each one of us is entitled to receive for one day in this House. As others have said, we know that the costs of child poverty do not end when a child reaches the age of 18. They can blight an entire life, with a child growing up likely to earn less, work less and suffer greater ill-health if their life started in poverty.
When I was a local authority leader, I introduced two measures in particular aimed at tackling child poverty and the barriers to health for young people: free healthy school meals for all primary school children and free swim-and-gym use for all residents. As well as giving that hand-up to young people in my borough, we sought to grow our economy to lift even more people out of poverty. That is also the mission of this Labour Government. Today, though, we are talking about that all-important task that government at all levels faces of putting a supportive arm around those most in need. The people this Bill will help are those who need that supportive arm. They are not the feckless or work-shy, as some might claim. As we have heard, 60% of those families who will be supported are already in work, but just struggling to get by.
As the third child in my family, I am not sure how I would have felt if I had known that the state and the Government did not value me in the same way as my siblings; but this is the position we have put too many children in over the last decade. We live in challenging and uncertain times, particularly for children and young people who see a future marked by increased costs for educational opportunities and a significantly changing work environment with the revolution of AI—before we even get to thinking about their security at home and in this country. The mark of any society must be the way in which it looks after its most vulnerable. We rightly protect our older residents. At the moment, we protect some children, but now is the time for us to show that we care about every child who lives in poverty.
Baroness Jenkin of Kennington (Con)
My Lords, I am grateful for the opportunity to speak in the gap, which also gives me the opportunity to congratulate the maiden speakers and say that I look forward to their participation in our work here.
I would like to associate myself with my noble friend Lady Stedman-Scott’s remarks. As the Minister will be aware—but possibly not all noble Lords—my noble friend’s life before she came here, working for three decades for the charity Tomorrow’s People, was dedicated to helping people furthest from the labour market to get and keep a job in order to live an independent life. She knows better than many, and from long experience, that this approach is the best route out of poverty.
At the heart of this debate lies the principle of fairness. Across the country, millions of working families make difficult financial decisions every day about the size of their family and what they can afford to provide for their children. It is reasonable that the welfare system reflects the same considerations. A two-child limit ensures that the system remains sustainable and focused on supporting those who need it most, while also maintaining fairness between households who rely on benefits and those who support themselves entirely through work.
We must also consider the broader responsibility of government to manage public finances carefully. Welfare spending is the largest category of UK public spending, and policies such as the two-child cap help ensure that support remains available for the most vulnerable, both now and in the future. In difficult economic times, choices about public spending are never easy, but responsible government requires that we strike a balance. The Government’s first duty is the security of this country and the British people. We know that defence spending has to increase to fulfil that duty.
The OBR calculates that lifting the cap will cost the taxpayer £2.3 billion this year, rising to about £3 billion by 2029-30, which is unsustainable in the current economic climate. With an estimated 29 million households affected, the cost per household per year is projected to be £80 to £100, which would be an additional challenge at a time when so many are struggling with costs. Our duty is not only to provide support but to ensure that the system remains fair, sustainable and credible for the taxpayers who fund it.
Lord Palmer of Childs Hill (LD)
My Lords, I compliment the maiden speeches of my noble friend Lady Teather, the noble Lord, Lord Walker, and the noble Baroness, Lady Antrobus. They were a credit to this House and we look forward to further contributions, which I am sure will come from all three noble Peers. I thank the Minister for her excellent summing up of what is happening and what we hope to happen.
These Benches support the Bill and I am very much disappointed with the Conservative Benches for opposing it. It is an improvement on an overdue measure that I have long spoken in favour of. It removes one of the ugliest features of the social security system—the two-child limit in universal credit. My noble friend Lady Teather spoke eloquently on this when she said that more than 1.5 million children are affected and denied the essentials they need to thrive. For my party, this change goes very much to the heart of who we are. We exist to build and safeguard a society that is free, open and fair. We want a society in which no one is enslaved by poverty, ignorance or conformity. That is why opposition to the two-child limit is not a new or convenient position for us. I say this as a chartered accountant who would love to balance all the books, but a fair society does not balance the books on the backs of the children.
There is a moral case for this change. The two-child limit has always rested on a deeply flawed premise. It effectively says that a third or fourth child is somehow less deserving of support than older siblings. But children do not choose the circumstances of their birth. We should know that. They do not choose whether their parents face illness, bereavement, separation, disability, insecure work or rising living costs. They do not have much say in being born, either. Yet this policy has punished children for circumstances entirely beyond their control.
On the scale of the problem and why it matters, we are debating this against the background of child poverty. About 4.5 million children in the UK are living in poverty—nearly one in three. Child poverty is not an abstract statistic; it is hunger, cold homes, anxiety, missed opportunities and diminished life chances. It is also increasingly deep poverty. Millions of children are now living well below the poverty line. The burden falls disproportionately on larger families, lone parent households, households with disabled people and many ethnic minority families. The Bill matters because it begins—only begins—to unwind a policy that is one of the major drivers of rising deep child poverty.
On what the Bill does and why the Liberal Democrats support it, the Bill removes the two-child limit in universal credit so that support is available for all eligible children in a household, not only the first two. It applies across Great Britain and Northern Ireland, with commencement from assessment periods starting in a few weeks’ time on 6 April 2026. We on these Benches support the Bill because it is the right thing to do for children and families. It is targeted and effective. It is good value in public policy terms. The Government’s own assessment and the evidence cited in various briefings make it clear that removing the limit is among the quickest and most cost-effective ways in which to reduce child poverty.
There is a practical case. This is not only social policy but economic policy. Children who grow up in poverty are more likely to experience worse educational outcomes, poorer physical and mental health, and fewer opportunities in adulthood. That means that child poverty stores up pressure for the NHS, schools, local services and the welfare system itself. It also means lost productivity, lost skills and lost tax revenues. In other words, child poverty is not only a moral failure but an act of economic self-harm. If the policy is removed, there will be gains in household income and significant reductions in relative poverty and deep material poverty. The Bill is a down payment on healthier families, better outcomes and a stronger country.
I state, because of some of the comments from the Conservative Benches, that between 2010 and 2015, the proportion of children in absolute poverty before housing costs dropped from 18% to 17%. Under the Conservative Governments between 2015 to 2023, this proportionately increased back to 18%. That is their policy, and the Conservatives are putting that forward again.
The Bill asks a basic question: do we value each child equally? The Liberal Democrats believe that the answer must be yes. Children are not an afterthought to public policy. They are not a line in a spreadsheet—and I am all for spreadsheets. They are, as has been said, 20% of our population but 100% of our future. By removing the two-child limit, we will take a meaningful step towards a country that is fairer, healthier and more hopeful. We on these Benches support the Bill and will work constructively to build on it. For those reasons, these Benches support the Bill’s Second Reading and are disappointed with the Conservatives’ refusal to support it.
Viscount Younger of Leckie (Con)
My Lords, in winding up for the Opposition, I say that we have had three remarkable maiden speeches this afternoon. I will make a few comments about each.
I am so pleased that the noble Baroness, Lady Teather, has recovered and regained her voice. I have no doubt that we will be hearing much of it. I hope that she will rejoin the Parliament Choir; I declare my interest as a tenor in the choir.
I applaud the clear energy, entrepreneurship and communication skills of the noble Lord, Lord Walker of Broxton. I acknowledge that he provides employment to many in the retail sector. I have no doubt that he will have much to offer from his high street experiences and, as he said himself, a fresh way of thinking, however that can be defined.
The noble Baroness, Lady Antrobus, delivered an excellent maiden speech. She will be invaluable in using her experience and knowledge of the Armed Forces, both in the air and terrestrially, in contributing to the House. We have been very lucky this afternoon.
I thank all other noble Lords who contributed to this debate and set out their views with such conviction on what is—in my view and in our view on this side—a deeply mistaken policy. I say that as someone who is proud of the compassion that defines this country. The British people are generous, fair-minded and instinctively willing to help those in genuine need. That spirit of neighbourliness and of looking out for one another is something we should always cherish and protect. The noble Baroness, Lady Teather, is right: handling language and collaboration and getting these matters right are important factors in communities, where matters can be extremely sensitive.
However, compassion must also be balanced with fairness, as my noble friend Lady Jenkin alluded to. I am afraid that this policy tips that balance too far the other way. It asks those who work hard, pay their taxes and support the system to shoulder ever-greater burdens while expanding reliance on the state in a way that risks undermining the very foundations that sustain it.
It would be easy for me to say that raising the cap would be the right thing to do, and I was very pleased to note that the right reverend Prelate the Bishop of Leicester and, indeed, my noble friend Lord Redwood acknowledge that we all want to reduce child poverty—I personally want to, we all want to, but how we do it continues to divide opinion; that much I think we can agree on.
I was struck by the remarks from the noble Lord, Lord Bird, in his powerful speech. I believe his clarion call for greater social mobility is a key point: a hand up, perhaps, to a better future—or, indeed, to any future for those who are really wallowing in poverty, particularly children. The noble Lord, Lord Watson, echoed this sentiment.
As my noble friend Lady Stedman-Scott set out, it cannot be right that parents who do the responsible thing, who go out to work, contribute to our economy, and carefully manage what they can afford for their families, are expected to fund a system in which others face far fewer of those same constraints. At its heart, that is the problem with the Bill: it seeks to address a serious issue but does so in the wrong way. In trying to demonstrate compassion, it risks undermining fairness and, without fairness, surely public confidence in the welfare system itself will begin to erode. Is it any wonder that an overwhelming majority of the country oppose this policy, as my noble friend Lady Stedman-Scott said?
This policy comes at a time when our welfare system is facing what can be described only as a mounting crisis. At the Spring Statement, the OBR confirmed that welfare spending is set to rise by £74 billion over the next five years. Forecasts also show that spending on health and disability benefits alone will be £1.3 billion higher than previously expected. At the same time, the economic outlook is deteriorating. The OBR now forecasts unemployment reaching 5.3%, higher than the 4.9% peak predicted only at the time of the Budget.
Despite the Chancellor’s repeated claims of responsible fiscal management and careful stewardship of the public finances, the reality is that welfare spending continues to surge. The total welfare bill will rise by £18 billion this year alone, then by roughly £15 billion every year across the forecast period. In total, the OBR expects the Government to spend £333 billion on welfare this year—10.9% of our entire economy. By 2030-31, that figure is projected to reach £407 billion—11.7% of GDP. The think tank Onward has warned that on this trajectory welfare payments will, in effect, cost individual taxpayers around £3,000 a year by the end of the decade as Britain’s benefit system edges towards becoming unsustainable.
The noble Baroness, Lady Sherlock, stated in her opening remarks that some think it is all about cost. Cost is a big factor, but it is not the only one, and I make the point that other benefits are there, including for larger families, to help with essential household needs, such as the household support fund directed through local authorities.
I understand the points the noble Lord, Lord Babudu, and the noble Baroness, Lady Sherlock, made about those being in work making decisions at that time about family size and then finding themselves out of work—that is an obvious and important point—and the need, which I feel strongly about, to support single-parent families.
My noble friend Lord Redwood eloquently iterated that there are other reasons why children wallow in poverty, such as dysfunctional family life and, as he said, which is very important, a lack of love. The noble Lord, Lord Sikka, made the very important point about the need for better pastoral help for parents. Handouts are not just the key. In short, the system is lurching in the wrong direction. Costs are already enormous and continue to climb at the same time as unemployment is expected to rise. This is simply not a sustainable position.
We must remember who ultimately bears that cost. An additional £3,000 a year does not fall on some abstract entity called the taxpayer, but on ordinary working people—teachers, nurses, those who work in the retail sector and families who rise early, work long hours and try to balance their household budgets without the benefit of generous state support. These are not the super-rich; they are the people who make up the backbone of our country. Before we expand the welfare state still further, we should at least ask ourselves what burden we are asking them to carry. I am not convinced that the Government have asked a question more searching than how they can placate their Back-Benchers for another few weeks. My noble friend Lady Stedman-Scott was absolutely right to point that out. It has to be said, although I see the Minister shaking her head.
My noble friend Lady Stedman-Scott set out clearly the fundamental flaw in the Government’s logic. Ever-increasing welfare spending does not solve poverty; it helps conceal it. A welfare offer of this scale risks doing something else far more damaging. It will begin to erode the very foundations on which the welfare system depends. The system ultimately relies on a balance—a word we have heard this afternoon. Those who can work do so, and through their work they support a safety net for those who genuinely cannot.
However, that balance is now under real strain. Welfare spending is forecast to rise by around a fifth over the next five years, at the same time as one in five working-age adults is not in work. We are well aware of those statistics. That trajectory should concern all of us. The welfare state was never intended to become an alternative to work. If too many people come to rely on benefits rather than the rewards of employment, the model will simply cease to function. I was struck by the strong points made by the noble Lord, Lord Walker, in this area. The system depends on contribution as well as support.
Yet instead of confronting that challenge, the Government’s response has been to step away from reform and move in the opposite direction, expanding spending commitments that the public finances can scarcely sustain. A welfare system that discourages work does not reduce poverty in the long term but risks entrenching it. If we are serious about giving people the best chance of a secure and independent life, that is a reality we cannot afford to ignore. This policy tips that balance even further in the wrong direction and the Government should be really concerned about the long-term effects that it risks having on our public finances and the welfare system as a whole. Labour Back-Benchers, I fear, are too wedded to the idea of the welfare state. It is akin to somebody inching their way along the branch of a tree further and further until it snaps.
When we step back from the detail of this debate, the question before us is very simple: what kind of welfare system do we want for this country? Do we want a system that is fair to those who fund it, sustainable for the long term and focused above all on helping people into work and independence, or do we want a system that grows ever larger, more expensive and more detached from the principle that work should always pay? The British people instinctively understand that balance. My noble friend Lady Stedman-Scott pointed out the statistics and polling. They are compassionate, but fair. They believe in helping those who genuinely need support, but also that those who can work should do so and that the system should never place the greatest burden on those already doing the right thing. For that reason, and in the interests of fairness, sustainability and the long-term health of our welfare state, I cannot support the Bill and I firmly believe that the cap should be reintroduced as soon as possible.
Baroness Sherlock (Lab)
My Lords, I am so grateful to all noble Lords who have contributed to this debate. I love listening to maiden speeches, when we get an insight into the range and depth of experience coming into this House. Today we heard three magnificent examples. If anyone outside is listening, that exceptional richness of experience is what this House can bring to debates. We have heard about defence and air power; conflict and resolving conflict; climbing mountains, both literal and metaphorical; the importance of business; the compelling relational power of tea in the Long Room and learning to play dominoes—I may be better at one of those than the other, but maybe time will tell. I thank all noble Lords so much for coming in and contributing.
In developing our child poverty strategy, we engaged extensively with all kinds of people, including families, campaigners and experts. The aim was to try to work out what would have the greatest impact on the day-to-day lives of children living in poverty. The message was really clear: remove the two-child limit. I am grateful to my noble friend Lady Shah for pointing out the challenges we inherited and why it takes time for Governments to work through dealing with everything that comes out.
The Bill is supported by over 60 organisations, representing anti-poverty charities, which is perhaps not surprising, but also children’s doctors, teachers and health visitors—the people who know only too well the damaging effects of poverty and see its consequences every day. I remain very grateful for the work of the campaigning organisations, those professionals who support our children and all those who pushed for this change, including the Bishops’ Bench. I share the remembrance of the former right reverend Prelate the Bishop of Durham, who pushed for this in his time in this House.
The Bill is an investment to deliver a better future for children and for our country. Many noble Lords, including the noble Baroness, Lady Teather, and the right reverend Prelate the Bishop of Leicester, have set out the devastating impact that poverty has on children. Many, including my noble friend Lord Babudu, have pointed out that poverty is not evenly distributed.
Poverty imposes really significant costs on individuals and the country. Let me start with the Official Opposition, because they have set out clearly why they oppose this. It is my experience, in many years in and around politics, that, if you want to defend the indefensible, the first thing you do is set up some clearly false dichotomies. What have we listened to today? “It is children versus defence”. Of course it is not. If I were going to play politics, I would point out that, if the Conservatives felt that passionately about it when they were in government, maybe they should not have cut £12 billion from defence spending in their first term alone; maybe they should not have cut spending from the 2.5% the last Labour Government left, pushing us to raise it to 2.6% by next year; maybe they should have slashed child poverty. They were not choosing between the two things: they attacked both of them. Now, we could have that kind of conversation, or we could have a different kind of conversation. Let us take a step back and look at what actually happens with the policies.
What is the other false dichotomy? I think we fall into making a mistake if we try to set up social security versus work. I am not repeating the figure that 59% of families hit by the two-child limit are in work, in order to make a political point; I am pointing out that our social security system is there to help people in and out of work, and to help them get from being out of work into being in work. If the barriers get in the way of people being able to move into work, the system is not doing its job. Every time we start trying to pretend that this is contrasting people lying in bed all day with the blinds shut with those who go out to work, we do everyone a disservice. Please let us not have that conversation.
What we want to do is recognise that we have to enable work, encourage work and take away the barriers to work—that is really important—and that neither those in nor out of work are static populations: people move between those states, for a whole range of reasons. Our job is to make sure that, for those who can work, they stay in work as much as they can, for as long as they can, and, if they come out, to help them back into it when they can—but, if they cannot, to support them, because that is what we do by pooling risk.
The noble Lord, Lord Redwood, made some very interesting points. I parted company with him when he got to a certain point in his speech, but he made a really interesting point in saying that this policy is clearly not a panacea. The state cannot and should not pretend that it can solve all the problems families have, and the state does not raise children: families do.
The starting point, however, is that, if we want to tackle child poverty, as the noble Viscount, Lord Younger, said he does, the first thing we have to do is stop making it worse: stop tipping more children into poverty every year. The second step is to work out what the barriers are to people moving into work and developing in their lives. The noble Lord, Lord Redwood, mentioned some of those that are nothing to do with money, and the state can only do what it can to try to make it as easy as possible for families to do the right thing: investing in relationships education, supporting families —all kinds of education—and communities and relationships. What the state can do is tackle the things it can do something about. It is definitely not all about money, but it is not not about money: the statistics show really clearly, for example, the impact of poverty on family breakup and on parents struggling to do the right thing by their kids. We need to do both.
The next thing we need to do is create opportunities. I always hate disagreeing with the noble Lord, Lord Bird, because I know that he will come back at me, rightly, but we have to start to move not away from but beyond “handout versus hand up”. I absolutely agree with him that our job is to give people a hand up. He has done that in his time—as, indeed, has the noble Baroness, Lady Stedman-Scott—but I would not contrast that with any support the state gives to those who are struggling when they need it. A lot of what we do is on both those things. Like my noble friend Lord Walker, I have a real interest in how we use my department to help those who are struggling to get into work. Just this week, I was at a conference talking to businesses that are helping ex-offenders into work.
Lord Bird (CB)
Is it not wonderful that social security can be used as a hand up? That is the point I am trying to make. I am not trying to make the point of work versus social security. I am saying that a hand up is absolutely marvellous. The greatest hand up that I got was a probation officer.
Baroness Sherlock (Lab)
Indeed, and that probation officer clearly did a very good job: look where the noble Lord has ended up. Would that they were all that successful. I suppose that that is quite a high bar at which to set them, but I commend it. That is a really great point, and I am now violently agreeing with the noble Lord; but I will move on.
I want the social security system to do its job, and for most people its job is to support them into work, and in work, and to develop them in work. That is very much what this Government are seeking to do.
One of the challenges with universal credit is about assumptions. It was designed to move people into and out of work—to work in and out of work—and when it works it does so very well. All we are doing is making sure that the system works even better than it does. But the assumption that this Government are doing the wrong thing by spending money on tackling child poverty is fundamentally mistaken. My noble friend Lord Walker talked about the need to make sure we tackle NEETs, for example. We have one in eight of our young people not in employment, education or training. They did not start at 16.
Baroness Stedman-Scott (Con)
We are not saying that the Government should not spend money. It is about what you spend it on, and how it is spent to get the best outcome from what you are trying to do.
Baroness Sherlock (Lab)
My Lords, I understand that, but I have looked at what the last Government spent the money on and at the results, and I do not like them, so we are going to do something different.
My simple view is that if we will the end of tackling child poverty, we have to will the means. We believe that removing this barrier is fundamental. Those young people who were NEETs at 16 did not start at 16: they started without the opportunities, without the education, and without the start in life they should have had. The evidence shows quite clearly that children who grow up in poverty are likely to have poorer mental health, fewer opportunities and less chance to do all those things we want them to do. What we are doing is enabling those people to have opportunities, giving them the start they need. If we can get that in place, the whole country benefits. Instead of supporting people not to work, we are giving them the chance to flourish as individuals and to make the contribution to our society that they will not get the chance to make otherwise.
Before I get myself into any more flights of rhetoric, I should answer some of the questions that have been asked. My noble friend Lady Lister asked about council tax reduction. I think she knows this, but just for the record, local councils are of course responsible for designing and reviewing their own council tax reduction schemes. My department has been working with the MHCLG to communicate the change to local authorities, and they have been encouraged to consider the impact of their schemes in the light of the removal of the two-child limit. In 2029-30 an estimated 560,000 families will see an increase in their universal credit award, with these families gaining, on average, £440 a month. The impact of transitional protection is included in the impact assessment, but not on the numbers of households.
The benefit cap was raised by my noble friend Lady Lister, and by the noble Baronesses, Lady Teather and Lady Bennett, and by my noble friend Lord Davies and a few others. This Government want to preserve the fundamental principle that work is the best route out of poverty. We believe that leaving the overall benefit cap in place encourages personal responsibility while maintaining the incentive to work. Where possible, it is in the best interests of children to be in working households. Being in work substantially reduces the chance of poverty: the poverty rate of children living in households where all adults are in work is 17%, compared to 65% for children who live in households where no adults work. We will continue to protect the most vulnerable—those who are unable to work because of a disability or a caring responsibility are protected and exempted from that.
The noble Baroness, Lady Bennett, asked about numbers. When I answered her Written Question, the impact assessment had not been published at that point. I can say that among households in scope to gain from the removal of the two-child limit in 2029-2030, approximately 50,000 are estimated to be capped before the policy change, and a further 10,000 households will be capped afterwards. In contrast, 550,000 households in Great Britain will gain in full from the removal of the two-child limit in 2029-30, as will an estimated 2 million children in the United Kingdom.
The noble Baroness, Lady Janke, and my noble friend Lady Shah raised the impact of poverty on children and schools—
Baroness Lister of Burtersett (Lab)
I am sorry to interrupt my noble friend, but a number of us have made the point about the thresholds for the benefit cap and the fact that child benefit is taken into account. When we were in opposition, we said that child benefit should not be taken into account in the cap. Can she comment on that?
Baroness Sherlock (Lab)
I have given the same answer about the levels a number of times. The cap has to be reviewed by 2027. The Secretary of State will review it at the appropriate time, certainly within the statutory deadline, and he will make the judgments he makes at the time. I am happy to convey the comments made on this to my colleagues in the department, but the Government have taken the view that they have on the cap. We will simply have to leave it at that, I am afraid.
On schools and education, it is striking that schools are using their stretched resources on services such as food banks and providing essentials to children. Research by the Joseph Rowntree Foundation shows that now one-third of primary schools run food banks, one-quarter are providing essentials, and 38% say staff provide for pupils and families out of their own pockets. We got the Children’s Commissioner’s office to do some research to support the development of the child poverty strategy. Children and young people spoke about how low income impacts their education and at times limits their career aspirations, including by restricting their access to extracurricular activities. This is an incredibly important point made by my noble friend Lord John, or possibly by my noble friend Lord Walker—I am sorry, I am getting very bad at names. We listened carefully to families when we did that, and the consistent message was that a whole range of benefits came from lifting the two-child limit. It is not just about money; it is about all the things that enables. This goes also to the points made by the noble Lord, Lord Redwood.
As for paying for this, the Government have always made clear how they will pay for things when they announce them. It was made clear that the removal of the two-child limit was fully funded by policies in the Budget, including reforming Motability tax relief, clamping down on fraud and error in tax and social security, and reforming the assessment process. Together, those measures will save £4.9 billion in 2030-31 versus the £3.2 billion cost of removing the two-child limit.
The noble Viscount, Lord Younger, raised the OBR and the welfare cap. The Government are committed to ensuring that social security spending remains on a sustainable path. We set a new welfare cap in the Autumn Budget 2024 to make sure that it remains under control for the course of this Parliament. The forecast for social security spending is virtually unchanged from the last OBR assessment, increasing by only 0.1% in 2029-30 in the forecast. Welfare spending is forecast to rise by less than half the amount it did under the previous Parliament—just over 0.3% of GDP by 2030-31 compared with 0.7% previously—and health and disability spending is expected to rise by only 0.3 percentage points compared with 0.5 under the previous Government. This Government inherited a system which did not do all the things the Opposition say they wanted it to do. In fact, we saw growing numbers of people economically inactive as a result of ill health and disability. That graph went up. We have been working hard to bend that graph by taking the steps needed to do it.
On employment, parental employment rates are already high, but if we want to get more parents into work, it is important that we remove the barriers to getting them there. One of the key barriers is childcare. That is why we have announced 30 hours of funded childcare for working parents, saving eligible families using all 30 hours up to £7,500 per eligible child per year. When we talk about the parents in larger families being in work, one of the challenges was childcare again. We are extending eligibility for universal credit upfront childcare costs to parents returning from parental leave to ease that transition back to work, and we are providing UC childcare support to help with the childcare costs of all children, instead of limiting it to two children, so that parents who have larger families can afford to go back to work. It clearly is not about work or social security; it is about social security enabling work and supporting it, as the noble Lord, Lord Bird, said so clearly. We know that there is more to do, which is why we are committing to a review led by the Department for Education across government about access to early education and childcare support and delivering a simpler system.
What is coming next? We have been clear that the child poverty strategy will not solve problems overnight. This is one step in a journey looking forward 10 years. We have already made a number of significant steps: investing heavily in expanding free school meals; introducing a fair repayment rate into universal credit; investing in support to help people with their energy bills; investing in support across the piece; raising the minimum wage; looking at what is happening with affordable housing; and investing in helping people to get into secure jobs.
The most important thing will be to monitor that, to make sure that we do it. There will be a comprehensive programme of analysis, making sure that we know the exact impact of the changes we are making. If the Opposition are worried, we will be monitoring the impact of what we do. This will enable us to work with government departments and the devolved Governments to consider what we do in future and to capture the data as we go.
This Government are determined to break down barriers to opportunity, to deliver economic growth and to raise living standards. Removing the two-child limit in universal credit remains the single fastest and most cost-effective lever we have to reduce the number of children growing up in poverty. It is at the heart of a wider strategy to drive down child poverty and set the next generation up for success. Far from being anti-work, this strategy includes our plan to make work pay, to improve job security and living standards, and to enable people to get on into work. We do not simply want to move people from being out of work into jobs from which they can never progress. If we want social mobility, we need to enable people to develop skills so that we can become a high-skilled, high-wage, high-investment economy, as we have been challenged to do. We have also announced increased universal credit support, getting people into work and into more hours because, above all, we believe in the value of every person and the contribution they can make.
The noble Baroness, Lady Teather, and the right reverend Prelate the Bishop of Leicester made some very interesting points. Part of what we have to do is to invest in communities and relationships. All we can do with money is remove barriers. What we need to do as a country is look at how we engage with our neighbours and our communities, and how we can support all those in our communities to develop and to fulfil their potential.
My noble friend Lord John said that a Labour Government are nothing if they do not do something to tackle poverty and inequality. That is exactly what we are doing here today. The Bill, along with the wider actions in the child poverty strategy, will help deliver the biggest reduction in child poverty over a Parliament since comparable records began in the 1990s. It is time to put this counterproductive and cruel policy into the dustbin of history, and to focus instead on building a system that gives children and their families the security and opportunities to build a better life, no matter their background. I commend the Bill to the House.
Bill read a second time. Committee negatived. Standing Order 44 having been dispensed with, the Bill was read a third time and passed.