Budget Resolutions

Debate between Paul Waugh and Daisy Cooper

Thursday 27th November 2025 Commons Chamber

[Paul Waugh (Rochdale) (Lab/Co-op)]

This is a Budget that cuts the cost of living for families in Rochdale, boosts apprenticeships, and helps the NHS and our public services—public services that were brought to their knees by 14 years of not just Tory cuts, but coalition cuts. This is a Budget that balances the books, with fairness at its heart, and it is also a Labour Budget that puts children at its heart. I want to focus, in particular, on the historic decision to lift the Tory two- child cap, a policy that has punished so many children in Rochdale and across the land, for the crime of simply being born.

As a journalist who worked up in the Press Gallery for 26 years, I reported on, reacted to and analysed Budgets over more than a quarter of a century. With any Budget, there is always talk of winners and losers, but when the two-child cap was introduced in 2016, the biggest losers were children. Think about that: children losing money because of the warped ideology that they were to blame for their parents’ poverty. I grew up on free school meals, so I know what it is like to be in a household where money is tight. Indeed, one of the reasons I stood for Parliament in the first place was to reverse the shocking rise in child poverty that occurred since 2010 under the last Tory Government, and particularly in Rochdale.

The decision to scrap the two-child cap would not have been possible without a Labour Government, but neither would it have happened without the many community groups and anti-poverty campaigners in each of our constituencies. Earlier this year in Rochdale we held a roundtable meeting on the Government’s child poverty strategy. It was a heartening gathering, because we in Rochdale are proud of the many things we do locally for our kids, from never closing Sure Starts—which was tough for the local council—to providing free breakfast clubs way ahead of any national roll-out, and giving kids a free lunch if they go to Saturday school.

However, our roundtable was also a sobering gathering, because despite everything we have done locally to combat poverty among toddlers and youngsters, many of the adults and campaigners there told us that the biggest problem was the national two-child cap, which has been a catastrophe for the incomes of many families on low pay or between jobs. I want to pay tribute to some of those campaigners and community workers in Rochdale: Jo Barker-Marsh, Aqub Nazir, Heather Madden and Nazrine Akhtar. Without their passion and commitment to helping our children, today would not have been possible.

I was not surprised by the Leader of the Opposition’s rant about welfare yesterday. She repeated the Tory misinformation about the two-child cap, basing it on the myth that penalising larger families will somehow stop others from having a third or fourth child. As the Chancellor said yesterday, and as my right hon. Friend the Secretary of State has made absolutely clear from the Dispatch Box today, there is no evidence that the two-child cap led to any change in family size. Why is that? It is because families have children for a whole host of reasons. Women certainly do not get pregnant to get more benefits. In fact, the real scandal in this country is that having children results in a substantial and long-lasting financial penalty for mothers, due to reduced earnings, unemployment and a lack of support. That is something this Government are addressing.

ONS research found that five years after the birth of a first child, a mother’s monthly earnings were, on average, 42% lower than they were one year before the birth. The important point to stress is this: people move in and out of work for a whole host of reasons beyond their control. Many people have had their third or fourth child before they lost the job, became ill or were widowed, disabled or had to care for a sick relative or a disabled child. There is a wider point, too, which is that welfare has become a pejorative term. We need to talk more about social security, a safety net that is there for families who fall on hard times through illness, redundancy and no fault of their own.

As has been said many times, more than six in 10 families on universal credit are in work. Many are on universal credit for only a few months until they can get back on their feet, or until their children are older, or they can sort proper childcare. No one in this party will defend the tiny minority who game the system, but the tabloid caricature of people lounging about on benefits is far removed from reality, particularly for parents. In the real world, many parents of kids in poverty go hungry themselves, rather than let their kids go without. Many cut back on essentials such as food and heating because they have to. The Joseph Rowntree Foundation found that the depth of hardship is particularly severe for families with three or more children, with around seven in 10 having to skip meals or go hungry.

[Daisy Cooper]

We Liberal Democrats welcome the decision by the Government to scrap the two-child benefit cap. Does the hon. Member agree that, as well as it being the right thing to do, it saves taxpayers money in the long term? We know that poverty has lasting impacts on people’s health and educational outcomes. In making the case to the British public, it would be helpful if the Government could explain the longer-term impact that poverty has for the taxpayer.

[Paul Waugh]

That is exactly what my right hon. Friend the Secretary of State for Work and Pensions set out at the Dispatch Box earlier, talking about the positive case for this move on child poverty.

In Rochdale, we feel child poverty more keenly than anywhere. The statistics for my constituency after 14 years of Tory cuts are shocking. Relative poverty in Rochdale went up between 2014 and 2024 from 33% to 44.1%. That is one of the highest rates in the country. The Conservatives like to talk about relative poverty, but absolute poverty went up from 31% to 39%. The latest figures show that the total number of children in absolute poverty in Rochdale was 9,380 in 2024, but that 44% child poverty rate in Rochdale is just the average. The figures are even worse in individual areas such as Wardleworth, Kirkholt, Deeplish, Smallbridge, Firgrove and Freehold, where up to 60% of children live in absolute poverty. Those children were the collateral damage in a Tory attempt to get a political dividing line. How disgusting is that?

The idea of the deserving and undeserving poor is as old as the Victorian workhouse. We should banish it to the dustbin of history, just as we are banishing the pernicious two-child cap to the dustbin of history. In Rochdale, more than 5,000 children will be lifted out of poverty by this Budget. That is 5,000 future nurses, plumbers, engineers, carers, teachers, entrepreneurs and soldiers who will now be given the best start in life that they need to achieve their dreams and fulfil their potential.

The last Labour Government, which did so much to help children escape poverty, once had a new policy called Every Child Matters. By putting hundreds of pounds in the pockets of Rochdale families, this Budget shows that this Labour Government are restoring that moral mission as a national priority, sending out the message loud and clear that all kids count.