Universal Credit (Removal of Two Child Limit) Bill

Lord Palmer of Childs Hill Excerpts

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

[Lord Palmer of Childs Hill (LD)]

My Lords, I compliment the maiden speeches of my noble friend Lady Teather, the noble Lord, Lord Walker, and the noble Baroness, Lady Antrobus. They were a credit to this House and we look forward to further contributions, which I am sure will come from all three noble Peers. I thank the Minister for her excellent summing up of what is happening and what we hope to happen.

These Benches support the Bill and I am very much disappointed with the Conservative Benches for opposing it. It is an improvement on an overdue measure that I have long spoken in favour of. It removes one of the ugliest features of the social security system—the two-child limit in universal credit. My noble friend Lady Teather spoke eloquently on this when she said that more than 1.5 million children are affected and denied the essentials they need to thrive. For my party, this change goes very much to the heart of who we are. We exist to build and safeguard a society that is free, open and fair. We want a society in which no one is enslaved by poverty, ignorance or conformity. That is why opposition to the two-child limit is not a new or convenient position for us. I say this as a chartered accountant who would love to balance all the books, but a fair society does not balance the books on the backs of the children.

There is a moral case for this change. The two-child limit has always rested on a deeply flawed premise. It effectively says that a third or fourth child is somehow less deserving of support than older siblings. But children do not choose the circumstances of their birth. We should know that. They do not choose whether their parents face illness, bereavement, separation, disability, insecure work or rising living costs. They do not have much say in being born, either. Yet this policy has punished children for circumstances entirely beyond their control.

On the scale of the problem and why it matters, we are debating this against the background of child poverty. About 4.5 million children in the UK are living in poverty—nearly one in three. Child poverty is not an abstract statistic; it is hunger, cold homes, anxiety, missed opportunities and diminished life chances. It is also increasingly deep poverty. Millions of children are now living well below the poverty line. The burden falls disproportionately on larger families, lone parent households, households with disabled people and many ethnic minority families. The Bill matters because it begins—only begins—to unwind a policy that is one of the major drivers of rising deep child poverty.

On what the Bill does and why the Liberal Democrats support it, the Bill removes the two-child limit in universal credit so that support is available for all eligible children in a household, not only the first two. It applies across Great Britain and Northern Ireland, with commencement from assessment periods starting in a few weeks’ time on 6 April 2026. We on these Benches support the Bill because it is the right thing to do for children and families. It is targeted and effective. It is good value in public policy terms. The Government’s own assessment and the evidence cited in various briefings make it clear that removing the limit is among the quickest and most cost-effective ways in which to reduce child poverty.

There is a practical case. This is not only social policy but economic policy. Children who grow up in poverty are more likely to experience worse educational outcomes, poorer physical and mental health, and fewer opportunities in adulthood. That means that child poverty stores up pressure for the NHS, schools, local services and the welfare system itself. It also means lost productivity, lost skills and lost tax revenues. In other words, child poverty is not only a moral failure but an act of economic self-harm. If the policy is removed, there will be gains in household income and significant reductions in relative poverty and deep material poverty. The Bill is a down payment on healthier families, better outcomes and a stronger country.

I state, because of some of the comments from the Conservative Benches, that between 2010 and 2015, the proportion of children in absolute poverty before housing costs dropped from 18% to 17%. Under the Conservative Governments between 2015 to 2023, this proportionately increased back to 18%. That is their policy, and the Conservatives are putting that forward again.

The Bill asks a basic question: do we value each child equally? The Liberal Democrats believe that the answer must be yes. Children are not an afterthought to public policy. They are not a line in a spreadsheet—and I am all for spreadsheets. They are, as has been said, 20% of our population but 100% of our future. By removing the two-child limit, we will take a meaningful step towards a country that is fairer, healthier and more hopeful. We on these Benches support the Bill and will work constructively to build on it. For those reasons, these Benches support the Bill’s Second Reading and are disappointed with the Conservatives’ refusal to support it.