Universal Credit (Removal of Two Child Limit) Bill

Debate between Rebecca Smith and Debbie Abrahams

Committee of the whole House
Monday 23rd February 2026 Commons Chamber

[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.