Two-child Benefit Cap: Foreign-born Children

Debate between Lord Farmer and Baroness Sherlock

Tuesday 3rd February 2026 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, the noble Lord is absolutely right about the effects of this. The Labour Party in government pledged to tackle child poverty. What this Government have brought forward is a child poverty strategy which, including removing the two-child limit, will bring another 550,000 children out of poverty by the end of this Parliament. That is what we are here to do; that is what we are shooting for.

I stress that this is about fairness. Of course, our benefit system is there to support those for whom this is their home; those who contribute. Of course it is there to be fair, but it is also there as a safety net, and our job is to get that balance right. In the case of children, it surely has to be right to tackle child poverty, to give them the opportunity and for the country to benefit from that.

[Lord Farmer (Con)]

My Lords, given the scale of additional public expenditure involved, and while recognising that welfare policy will not be the primary driver of migration, what steps are the Government taking to ensure that lifting the two-child limit does not inadvertently act as a pull factor for economic migrants to present initially as asylum-seeking families, and how will this be monitored?

[Baroness Sherlock (Lab)]

My Lords, I have seen no evidence that anything as specific as this has any impact on asylum. I am sure the noble Lord is aware that our system is so strict that, for somebody to be able to come to this country, they need to meet the requirements. If someone is in the country illegally, they are not entitled to access public funds. If they are entitled to universal credit, they are expected to work. Our system is designed to support people into work but also to require that they work. This year the DWP will consult on making sure that we look at the relationship between residence requirements and our benefits system and prioritise resources for those who are making an economic contribution—but nothing in that says that we do not want to tackle child poverty. I am sure the whole House agrees with that.

Universal Credit: Two-child Limit

Debate between Lord Farmer and Baroness Sherlock

Wednesday 10th December 2025 Lords Chamber

[Lord Farmer]

To ask His Majesty’s Government what assessment they have made of the impact on work incentives of lifting the two-child limit in Universal Credit.

[The Minister of State at the Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, this Government are determined to lift children out of poverty, and removing the two-child limit is the fastest and most cost-effective way to do so. The benefit cap is still in place, encouraging parents to take responsibility and work towards financial independence. Our approach balances fairness and provides a strong safety net without undermining the incentives to work.

[Lord Farmer (Con)]

My Lords, recent international evidence found that unconditional cash transfers increase fertility. Families claiming health-related benefits are not capped, so even these workless families will get UC for every child, again affecting work incentives. Research by the Institute for Fiscal Studies found that money-per-child tax credits increased births by 15% and decreased contraceptive use among beneficiaries. Have the Government assessed whether lifting the two-child limit will incentivise more births in benefit-dependent households, and whether many of the 450,000 children this measure intends to lift out of poverty would not otherwise have been born?

[Baroness Sherlock (Lab)]

My Lords, the Government have seen no evidence that the two-child limit had an impact on family size. For example, 47% of households affected by the two-child limit were not claiming universal credit when any of their children were born. In other words, things happen; people set out, they have children and something happens. Maybe someone loses their job, they are bereaved, their spouse leaves them, or they get sick and cannot work. The welfare state should be there to support people, both into work and in work, but it is also there to support them when they cannot work. We already know that some 60% of households affected by this are in work. Our strategy is to make sure we do all we can to get people into work, get them to develop in work and support them, but we are there as a safety net when they cannot do so.