Universal Credit (Removal of Two Child Limit) Bill

Stephen Timms Excerpts

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

[The Minister for Social Security and Disability (Sir Stephen Timms)]

Like the shadow Minister, I will start by quoting my right hon. Friend the Secretary of State for Work and Pensions. At the start of the debate, he said that this Government have chosen to reject the politics of division and of rage. Instead, we have chosen to seek to bring the country together and to open up a hopeful way forward. That is the choice that underpins this Bill.

It was my great privilege to take through this House the Child Poverty Act 2010, which was referred to by my hon. Friend the Member for Calder Valley (Josh Fenton-Glynn). That Bill, as he pointed out, had all-party support. George Osborne spoke in favour of it. A few months later, George Osborne was the Chancellor of the Exchequer, and the Government took the opposite stance. The four separate child poverty targets were scrapped. The headline rate of benefits was over time cut to the lowest real-terms level for 40 years. The Child Poverty Commission set up by the Act was replaced by the Social Mobility Commission, and child poverty eventually rocketed by 900,000 to 4.5 million. That is what Tory policies did. Their claim of wanting to tackle child poverty proved to be hollow, and we discovered the authentic voice of the Tory party, which we have heard again this afternoon.

We should not forget the contribution of the Tories’ coalition partners in the 2010 to 2015 Government. I warmly welcome the Lib Dem support that we have heard today. The hon. Member for Torbay (Steve Darling) made a thoughtful speech on behalf of his party, and we also heard from the hon. Members for Ely and East Cambridgeshire (Charlotte Cane), for Stratford-on-Avon (Manuela Perteghella), for Eastleigh (Liz Jarvis) and for Mid Dunbartonshire (Susan Murray). Their party leader was in the Cabinet when much of the damage was done, and he did nothing to stop it when it came to the crunch. In the battle against child poverty, the Lib Dems were nowhere to be seen.

[Steve Darling]

Will the Minister give way?

[Sir Stephen Timms]

I will not just at the moment. Poverty does immense harm, as we have heard, to children and their future prospects. In the classroom, children eligible for free school meals are on the wrong end of an education gap that reaches 19 months by age 16. They earn around 25% less at age 30. Recent research by Liverpool University has shown that children growing up below the poverty line are three times more likely to be not in education, employment or training as young adults. To tackle the NEET problem—as we must, with almost a million young people left NEET by the last Government—we have to tackle child poverty, too.

We have heard arguments in this debate that we are piling up costs for the future. Actually, it is the failures of the past that have piled up those costs, and we are now having to address that. The costs of child poverty play out throughout the lives of those affected. They play out in our social security system, in the NHS and in other public services, too. The Tories claim that by making those cuts, they were saving money. What they were doing, in fact, was heaping up massive costs of future failure, which we are all now having to pick up.

The Bill will deliver a better future for our children and for the country. Removing the two-child limit in universal credit will lift 450,000 children out of poverty by the end of this decade, and that figure rises to more than half a million children alongside other measures in our child poverty strategy. That is a generation less likely to struggle with their mental health, more likely to do well at school and more likely to be in work as young adults and to thrive in their future working lives. That is a generation with the capacity to thrive. That is the future we are choosing to build.

[Siân Berry]

The Government narrowed the scope of the last benefits Bill, and it could widen this Bill to take in the wider benefit cap, too. The Chancellor who could find the money for that is right next to the Minister. Can the Minister explain why, despite the interest in lifting the overall benefit cap in the Chamber today, according to the impact assessment the only options assessed were doing nothing or this very narrow measure?

[Sir Stephen Timms]

The change for which I think the hon. Lady is arguing would make a relatively modest alteration to the figures. There is a real advantage in the benefit cap, in terms of the incentive to work. We are not proposing to change that, and in the changes that we are making we are maintaining that incentive very robustly. This is a change from the choices of the last Government, which left us with a third of primary schools running food banks.

I echo the tribute paid by my hon. Friend the Member for Liverpool Riverside (Kim Johnson) to the work of the End Child Poverty Coalition. Members including my hon. Friend the Member for St Helens North (David Baines) rightly referred to the Child Poverty Action Group, and others mentioned the Joseph Rowntree Foundation. I pay tribute to all those who have campaigned, successfully, for the change that we are making.

The shadow Secretary of State, the hon. Member for Faversham and Mid Kent (Helen Whately), said in her opening speech that her party did not accept the relative poverty definition. As we were reminded during the debate, her party embraced that definition in 2010—it was part of the change that was made at the time—but between 2010-11 and 2023-24, even absolute poverty rose. It was higher at the end of that period than it had been at the beginning. That was an extraordinary feature of her party’s record in government.

I am grateful to my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) for her contribution to the debate and for the work of her Work and Pensions Committee, alongside that of the Education Committee, chaired by my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes), in scrutinising our child poverty strategy. The points that she made were absolutely right.

My hon. Friend the Member for Lewisham East (Janet Daby) was, I think, the first to draw attention to the struggle that teachers are having in supporting children in classes. According to survey evidence, in 38% of schools staff are currently paying out of their own pockets to provide essentials for their pupils because their parents cannot afford to buy them. They have full-time roles tackling hardship, taking away funds that ought to be spent on education.

The hon. Member for Hinckley and Bosworth (Dr Evans) made a thoughtful speech, as he often does, but he was wrong. He said that the extra money would be for people because they were not working. It was pointed out by my hon. Friend the Member for West Dunbartonshire (Douglas McAllister), my hon. Friend the Member for Corby and East Northamptonshire (Lee Barron)—in a spirited contribution—and my hon. Friends the Members for Ipswich (Jack Abbott), for Isle of Wight West (Mr Quigley), for Southampton Itchen (Darren Paffey), for South Derbyshire (Samantha Niblett), for Nottingham East (Nadia Whittome), for Bishop Auckland (Sam Rushworth) and for Peterborough (Andrew Pakes) that the great majority of the beneficiaries of this measure are people in work, and as a result the hon. Gentleman’s argument crumbled away.

[Dr Evans]

rose—

[Sir Stephen Timms]

No, I will not be giving way.

It was very interesting to hear the arguments of the hon. Member for Runcorn and Helsby (Sarah Pochin). Her party is looking more and more like a cut-price Boris Johnson reunion party, with all the old faces turning up on the Reform Benches. Now they are even starting to sing some of the old songs. The leader of their party has been talking for years about opposing the two-child limit, and just a few weeks ago, the right hon. and learned Member for Fareham and Waterlooville (Suella Braverman) wrote an article in which she said that she opposed it. Today they are voting with the Tories in favour of the cap. Those old policies would cause the same damage if they were brought in again in the future.

I remember a time when there seemed to be at least some degree of consensus in the House on the importance of tackling child poverty. Well, there was not much sign of that among Conservative Members this afternoon, and I am sorry that we have lost it. Scrapping the two-child limit on universal credit is the single most effective lever that we can pull to reduce the number of children growing up poor, and in pulling that lever we are helping hundreds of thousands of children to live better lives now, and to have real grounds for hope for their futures. We are supporting their families, the majority of whom are working families, and by enabling the next generation to fulfil its potential we are investing in our country’s success in the years to come.

The Bill is the key to delivering the biggest fall in child poverty in any Parliament on record, and in doing so it will make a very big contribution to the missions of this Government. Our manifesto was summed up in one word—“change”—and this is what change looks like: ambition for families, and for the country.

Question put, That the Bill be now read a Second time.

The House proceeded to a Division.

[Madam Deputy Speaker (Caroline Nokes)]

Will the Serjeant at Arms investigate the delay in the Aye Lobby?

Universal Credit (Removal of Two Child Limit) Bill

Stephen Timms Excerpts

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

[The Minister for Social Security and Disability (Sir Stephen Timms)]

It is a privilege to bring this Bill back before the House. This Government believe that everybody should have opportunity in life: opportunity to achieve their potential and their ambitions, whatever their background. However, at the moment too many children are held back by the scourge of poverty, which affects their wellbeing, how well they do at school and their prospects in their adult working lives as well. No child should have to face lifelong consequences like those, and neither should the country have to bear the huge cost of so much wasted talent and potential.

Lifting the two-child limit in universal credit is the single most cost effective lever that we can pull to reduce substantially the number of children growing up in poverty. In doing so, we are helping hundreds of thousands of children to live better lives, supporting their families and investing in their future success. It is this Government’s mission to break down barriers to opportunity, to change the course of children’s lives for the better and to build a more hopeful future. The Bill makes a big contribution, delivering more security, more opportunity and more respect for families and communities across the UK.

Clause 1 removes the universal credit two-child limit in Great Britain from April this year. By doing so, we will lift 450,000 children out of poverty. That means that for assessment periods starting on or after 6 April, the universal credit child element will be included for all children in the household, increasing the amount of social security support available to families on universal credit with three or more children. All the associated exceptions will be removed at the same time, including the notorious rape clause.

[Kirsty Blackman (Aberdeen North) (SNP)]

Specifically on that point, does the Department have good enough data on subsequent children? Have people provided the information that the Department needs to ensure that the extra payments can be made timeously?

[Sir Stephen Timms]

We are confident that we can do that from April onwards. Reinstating support for all children in universal credit is a key step to tackling the structural drivers of child poverty. This Bill, combined with other measures in our child poverty strategy, will lift over half a million children out of poverty.

Clause 2 removes the two-child limit from universal credit in Northern Ireland from April. We are including Northern Ireland in the Bill at the request of the Northern Ireland Executive, who are bringing forward a legislative consent motion in the usual way. I am delighted to see the hon. Member for Strangford (Jim Shannon) in his place. On Second Reading, he made the point that 50,000 children in Northern Ireland will be lifted out of child poverty. He rightly said:

“If anyone is against that, there is something wrong with them.”—[Official Report, 3 February 2026; Vol. 780, c. 168.]

I agree with him on that point and I am grateful to him for making it.

[Jim Shannon (Strangford) (DUP)]

I very much welcome what the Government are bringing forward. It is good news and, as the Minister says, if anyone is against that, there is certainly something wrong with them. I cannot see how the measure will not be welcomed. The fertility rate in Northern Ireland is 1.71 children per woman, but for the population level to be stable it needs to be 2.1 children per woman. Does the right hon. Gentleman think that the measures in the Bill will encourage more people to have children? If they do, then that is good news as well.

[Sir Stephen Timms]

I am not sure what the effect will be. It is often said that a Labour Government has the effect of increasing the birth rate, but whether that will prove to be the case this time, I do not know.

Child poverty is a big challenge. Reducing it over the next 10 years will require commitment and collaboration across all four nations. The strategy, including removing the two-child limit, builds on plans under way across Government and devolved Governments. We will continue to collaborate with devolved Governments on the issue, particularly through the implementation phase that will now follow.

Clause 3 sets out the territorial extent of the Bill, the commencement dates for each of the sections, delegated powers and the short title of the Act.

The Government recognise the consequences of child poverty and the damage that it does to a child’s life chances. In the poorest 10% of areas, babies are twice as likely to die before they turn one as those in the wealthiest 10% of areas. Poorer children are more likely to have mental health difficulties by the age of 11, to be unemployed later and to earn less as adults. We estimate that the Bill will increase the universal credit award for 560,000 families, who will gain on average £5,310 per year. That is a much-needed change from the choices of the previous Government—they chose austerity, and children paid the price. Tackling child poverty is an investment in our economy and a downpayment on Britain’s future.

[Rachael Maskell (York Central) (Lab/Co-op)]

Before the House are four new clauses to the legislation. They set out a pathway through which we can generate data, particularly around the welfare cap, which we know holds back 141,000 children. In the assessments that the Government make, will the Minister draw out particularly the impact of the welfare cap on those children? Will he look to remove it to ensure that those children are not held back in poverty?

[Sir Stephen Timms]

I am sure that we will turn to the points that my hon. Friend makes in a few moments, but I reassure her that we will undertake a thorough evaluation of the impacts of the strategy. We will publish regular updates, and I think she will find there the information that she is interested in.

We cannot leave millions of children to succumb to the damaging impacts of poverty. The Government want instead to invest in children and in Britain’s future.

[Madam Deputy Speaker (Caroline Nokes)]

I call the shadow Minister.

--- Later in debate ---

[The Second Deputy Chairman of Ways and Means (Caroline Nokes)]

I call the Minister.

[Sir Stephen Timms]

I thank all Members who have contributed to the debate. Interventions in the child poverty strategy will lead to the biggest expected reduction in child poverty over a Parliament since comparable records began. I well understand the concerns of those saying we should go further, and it is certainly right to urge the Government to do that, but let us recognise how big a change this will be. Removing the two-child limit is the key step. It will help children to live better lives, fulfil their potential, have better mental health, do better at school, and thrive in the future. That change is in the national interest.

The amendments propose a number of reports on different topics, and I am grateful that everybody who has spoken to them has indicated that they support the Bill. New clauses 1 and 4 ask the Secretary of State to report on the effect on children in households subject to the benefit cap. Indeed, new clause 4, tabled by my right hon. Friend the Member for Hayes and Harlington (John McDonnell), fulfils a commitment that he made on Second Reading to devise an amendment that would have that effect. It is an important point, and something we need to monitor carefully, but it is in the best interests of children to be in working households—and keeping the benefit cap in place protects the incentive to work. Work incentives are important. Under the policies of the last Government, far too many people gave up on work and concluded that it was not worth their while. We want it to be clear to everyone that it is worthwhile to be in work, and the Universal Credit Act 2025, enacted last summer, made an important step in that direction.

Removing the two-child limit does not undermine work incentives. From time to time, the Conservatives suggest that it does, but actually it does not. Removing the two-child limit increases the income of many families in work and increases the reward for work, and it does not undermine work incentives.

[John McDonnell]

There is an element of contradiction in what the Minister has said. Until now, the Government’s argument has been that one of the most disastrous disincentives to work is low wages, so they have rightly concentrated on raising the minimum wage and aiming for a proper living wage. Our argument has never been that lifting people out of poverty is a disincentive to work—it has always been about low wages.

--- Later in debate ---

[Sir Stephen Timms]

My right hon. Friend is right that raising wages has been a crucial part of the Government’s strategy, but removing the benefit cap would reduce work incentives. My hon. Friend the Member for Salford (Rebecca Long Bailey) said that there is no evidence that that is the case, but actually there is such evidence—from the Institute for Fiscal Studies, for example. It is not a huge amount of evidence but nevertheless there is evidence that the benefit cap provides a modest but significant incentive for work. Our view, for the time being at least, is that that should be maintained.

We have published an impact assessment as part of the Bill. It sets out the number of households that will not gain in full or will only partially gain from this measure because of the benefit cap. The Department publishes quarterly statistics on the benefit cap, which includes the number of households that are capped and how that changes over time. The most recent quarterly statistics show that of 119,000 households capped at the start of the quarter that ended in August last year, 40,000—about one third—were no longer capped by the end of the quarter, although others were newly capped, so there is a lot of churn in the cohort of capped households. The 40,000 households that left that cohort included 2,900 who had ceased to be capped because their earnings exceeded the threshold of full-time earnings at the national living wage. We want to encourage more people to make that transition.

We also publish statistics on the number of households affected by both the two-child limit and the benefit cap, with the next annual statistics to be published in the summer. After that, the quarterly benefit cap statistics will show how the number of capped households has changed after the two-child limit has been removed.

[Kirsty Blackman]

Those statistics will show the number of households that are capped, but they will not show how many have come into the benefit cap as a result of the removal of the two-child limit. Will the Minister be able to show a link between how many new families are being capped as a result of the two-child limit, meaning that those households are now disadvantaged again, even though the two-child limit has been removed?

[Sir Stephen Timms]

We have set out estimates of the effects that we think will result from the removal of the two-child limit, and there will be more information in the baseline evaluation report that we will publish in the summer.

My hon. Friend the Member for Portsmouth North (Amanda Martin) made some important points. I particularly agree with her about the importance of scrapping the rape clause, which had been a feature of the legislation since the two-child limit was introduced. She is right that we need to understand properly the impacts of policy interventions. We have published a monitoring and evaluation framework alongside the child poverty strategy that sets out how we will track and evaluate progress, reflecting our commitment to transparency, accountability and continuing to learn from what is effective. The baseline report will be published in the summer, as I have said, and set out details on plans alongside the latest statistics and evidence, and we will report annually on progress after that.

The information that we are committed to publish will provide the information looked for in these new clauses. I very much look forward to the report from the Work and Pensions Committee, which was referred to in an intervention by the Chair, my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams).

[Siân Berry]

Will the Minister tackle the point that I made in my speech? There is a possibility of people being denied disability benefits, as the result of separate work for which he is responsible, and potentially falling into the cap by losing the exemptions. That worries me greatly with respect to my own constituents.

[Sir Stephen Timms]

One of the new clauses touches specifically on disabled people. That new clause was not moved, but, as the hon. Lady knows, we are undertaking a review of personal independence payments, which I am co-chairing with others. We will see what the outcome of that is, but if there are to be changes in eligibility we will certainly set out details on the effects on the benefit cap and other things as those things progress.

I ask my hon. Friend the Member for York Central (Rachael Maskell) to place an order on my behalf for Kate Pickett’s latest book, which I am very keen to have a look at.

New clause 2 is specifically about households in poverty with a disabled family member. I agree that monitoring and evaluation of that and other things is very important, but we should not have an assessment that sits in isolation from the impact assessment that I have described, which we are committed to delivering alongside the wider child poverty strategy.

New clause 3 asks that we review the impact of child poverty on destitution and wider social and economic outcomes. I am grateful to the hon. Member for Witney (Charlie Maynard) for his support for the Bill. We have set out a second headline metric; we will measure deep material poverty in the child poverty strategy in the monitoring and evaluation framework. In that evaluation, we will track progress against two headline metrics. The first metric is relative low income—a metric embraced by David Cameron when he was the leader of the Conservative party but sadly not now recognised by the Conservatives. The second metric is deep material poverty, which will pick up on the concerns that the hon. Gentleman raised.

[Rebecca Smith]

I have been wanting to mention this point throughout the debate, but I have not had the right opportunity. Obviously a large number of these new clauses look at reporting back. I appreciate that the child poverty strategy involves a lot of reporting back, but is the Minister aware that the Department for Education does not yet have the records of which local councils have taken up auto-enrolment for free school meals? While the child poverty strategy has introduced universal breakfast clubs, there is no matrix to be able to decipher whether auto-enrolment for free school meals is working. In some cases, such as in the county that I represent, that has meant a significant amount of money for those local authorities deliberately to try to tackle poverty. Will he look into tackling that?

--- Later in debate ---

[Sir Stephen Timms]

I am sure that the hon. Lady will raise that matter with the Department for Education. That is a very important point.

We are extending free school meals to all children in families claiming universal credit; that is an important additional element of the child poverty strategy. There will be a comprehensive programme of analysis of the drivers of child poverty and the impact of specific interventions so that we can better learn what works and assess what further steps are needed. We will continue to gather evidence for further interventions beyond those that we have announced so far.

For too long, the tide of child poverty was allowed simply to rise. It is high time to turn that tide. This Bill is the centrepiece of our child poverty strategy. It will deliver the most substantial reduction in child poverty of any Parliament since records began and make a decisive break from the inaction and indifference of the past. Government can make a difference: we can help children and their families to lead better lives now and in the future for the benefit of all. It is for all those reasons that I hope the Committee will support the Bill and reject the new clauses.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clauses 2 and 3 ordered to stand part of the Bill.

New Clause 3

Review of the impact of the Act on child poverty, destitution, and wider social and economic outcomes

“(1) The Secretary of State must, within 12 months of this Act coming into force, review the effect of this Act on—

(a) overall levels of child poverty in the UK;

(b) levels of destitution and deep poverty among households with children;

(c) households in receipt of Universal Credit which include children;

(d) educational outcomes for children in households affected by poverty;

(e) physical and mental health outcomes for children in households affected by poverty; and

(f) longer-term impacts on economic participation, workforce skills, and demand on health and welfare services arising from child poverty and destitution.

(2) The Secretary of State must lay before Parliament a report setting out the conclusions of the review.”—(Charlie Maynard.)

This new clause would require the Secretary of State to undertake a review of the effects of the Act on child poverty, destitution, and wider social and economic outcomes.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

--- Later in debate ---

[Sir Stephen Timms]

I beg to move, That the Bill be now read the Third time.

Scrapping the two-child limit is an investment in the future of children and of the country. Two million children will benefit from this Bill. We will be held to account on progress through the monitoring and evaluation arrangements we have put in place to ensure that the change we are making is genuinely lasting. I want to thank every Member who has contributed to these debates. Removing the two-child limit from universal credit will help more children to fulfil their potential, to grow up make a positive contribution and to be part of a fairer, stronger country. I hope that the whole House will now support this vital measure.

[Madam Deputy Speaker (Caroline Nokes)]

I call the shadow Secretary of State.