Autumn Budget 2025

Baroness Deech Excerpts

Thursday 4th December 2025 Lords Chamber

[Baroness Deech (CB)]

My Lords, this is a Budget that punishes anyone who tries to do the right thing. I have driven electric cars for 10 years, only to find that there is no benefit. I would not blame anyone who now decided to buy a petrol car while they can.

The Prime Minister hails the abolition of the two-child benefit cap as a moral advance towards reducing child poverty. Yet it could equally well be said that it is immoral when working families have to support those who have more children than they do without counting the cost or working. This is not the fairest and most effective way to tackle poverty. The cap reflected fairness. Taxpayers should not subsidise family size choices that they themselves funded.

Critics argue that children should not suffer for birth circumstances. This is true, but welfare generosity has overridden good parenting aims and work incentives. Evidence shows that removing the cap could reduce employment incentives. By 2026, an out-of-work family with three children will get more in benefits than a working household on the national living wage. For single parents, the gap is equally true. We can all see that work does not pay and there is no disincentive to dependency on benefits.

Lifting the cap does nothing to address deeper causes of poverty. Consider child maintenance. As of March, parents owed nearly £493 million in unpaid support, leaving more than 300,000 children without legally owed payments. The Child Maintenance Service has failed to enforce compliance, with hundreds of millions in arrears. One in five separated parents fails to pay full child maintenance. Enforcing maintenance payments would move 100,000 children out of absolute low income each year. It is almost taboo to say that Governments should not be incentivising family break-ups and unstable cohabitation arrangements. They need attention. I ask the Government to help the Child Maintenance Service get the money for these children.

Child poverty is predictable. Tower Hamlets, for example, now records the highest overall rate at 46.5%. Families there have higher birth rates, with the lack of extra benefit having no effect. Families from ethnic minority backgrounds are disproportionately affected, with nearly half of children from black and Asian communities living in relative poverty, compared with a quarter of white children. Up and down the country, the extra cash will go where these conditions are found, but the lifestyle is unlikely to change for the better.

There are better alternatives. Early interventions, such as more provision of affordable childcare, encouragement to girls to get as much as education as possible before starting a family, as well as encouraging women to go out to work, would bring long-term benefits for health, education and family stability. Strengthening social services and expanding childcare would address root causes more effectively than lifting the cap, and it would do more to ensure that child poverty is not handed down generation to generation.

Welfare policy is not just about handing out cash without responsibility. There is nothing wrong with suggesting to couples that they should not have more children if they cannot look after them and that they should not expect others to pick up the tab. Ending the cap may ease hardship for some families—provided the cash is spent on children—but it is a divisive, blunt instrument, seeming to be set more to please party activists than the general tax-paying public, who tend to be not in favour.