Universal Credit (Removal of Two Child Limit) Bill

Debate between Rebecca Smith and Sam Rushworth

2nd reading & Money resolution
Tuesday 3rd February 2026 Commons Chamber

[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.

[Sam Rushworth]

Will the shadow Minister give way?

[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.

--- Later in debate ---

[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.

[Sam Rushworth]

Will the shadow Minister give way?

[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.