Universal Credit (Removal of Two Child Limit) Bill

Baroness Shah Excerpts

2nd reading & Committee negatived & 3rd reading
Thursday 12th March 2026 Lords Chamber

[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”.