Universal Credit (Removal of Two Child Limit) Bill

Sam Rushworth Excerpts

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

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

Fairness matters, not only to those receiving the support but to those making the difficult choices without it. During the short time I have, I will talk about the principles and then the context.

I come to this subject thinking about the publican in my constituency who has two children and who wakes up in the morning, leaves their house in Barwell and goes to their business. They have seen their national insurance contributions rise, their valuation has changed and the tax has gone up on that, the rate relief has been withdrawn from them and they have seen the minimum wage go up. Those are all costs that they are having to consider. What about the independent pharmacist on the high street, who gets up and goes to work in Hinckley, having to face the fact that national insurance contribution costs are going up?

[Sam Rushworth (Bishop Auckland) (Lab)]

The hon. Gentleman mentions the local pharmacist. The local pharmacist in my constituency is my twin sister. She put herself through a degree in pharmacy while on universal credit as a single parent of three children. That was not her choice; it was a position that was thrust upon her. What would the hon. Member say to people like her?

[Dr Evans]

I would credit her. She is a credit to the hon. Gentleman’s family for what she has managed to achieve.

The key point I am trying to get to is that, when those people leave their doorstep, is it fair that the choice they have made to have only two children is simply thrown out the window, because an extra £3,650 is now being given to the parent of the third and fourth child next door, simply for not going to work? That is not fair, and that is the heart of the principle.

At the end of the day, the welfare state works best when it is a bridge to work and not a substitute for it. We have often heard about the working poor.

--- Later in debate ---

[Sir Ashley Fox (Bridgwater) (Con)]

The benefits system is a safety net designed to support people in hardship, but a fair system must balance that with the needs of those who pay for it. Benefits are paid by the taxpayers of today or, if the money is borrowed, as is so often the case with this Government, by the taxpayers of tomorrow. Every time the cost of benefits rises, so does the burden on the taxpayer, and that cost is growing unsustainably. Spending on health and disability benefits alone is set to hit £100 billion a year by the end of the decade. It is a mark of Labour’s irresponsibility that it presents a Bill today to increase welfare spending further.

I believe in personal responsibility. Not only should our country live within its means, but every individual and family should do so too. Many thousands of couples every year think about whether to have children. They make that choice based on a number of factors, but one of the most important is whether they can afford to bring up that child as they would like to. Those in receipt of benefits should face the same choices as those in work. That is why the Conservatives introduced the two-child benefit cap, and it is why I believe it should be retained.

Under the pre-2017 system, there was a fundamental element of unfairness. A family in receipt of benefits saw them increase automatically every time they had another child. That was not true of a family not in receipt of benefits. Why should a taxpayer who has decided that they cannot afford more children subsidise the third, fourth or fifth child of someone not in work?

I understand why Labour Members are in favour of more welfare spending. They stopped representing working people a long time ago, and they now want to create a society where more than half the population is dependent on the state to ensure their re-election. Why has the leader of Reform UK, the hon. Member for Clacton (Nigel Farage), supported scrapping the two-child cap until so very recently? Voters in my constituency, some even sympathetic to his cause, have been horrified. I think the answer is that he is chasing votes in the north of England, hoping to win support from former Labour voters. That instinct for higher spending shows that Reform UK is wholly unserious about governing our country. Britain needs a Government determined to deliver the changes we need: controlling public expenditure and reducing borrowing, leading to lower taxes and a stronger economy.

[Sam Rushworth]

I am deeply offended by the hon. Gentleman’s comment about people in the north of England, as though they are people who simply vote for their own welfare. That is not true. The people I represent are proud to be hard-working people in good working-class jobs, and many of them have children who have been impacted by the two-child cap. Would the hon. Gentleman like to apologise to them?

--- Later in debate ---

[Sam Rushworth (Bishop Auckland) (Lab)]

The last time we debated this issue, I took many interventions from Conservative Members—there are fewer of them in the Chamber today—who wanted to know whether I would support lifting the two-child cap. As I said at the time, increasing the household incomes of children in poverty is one of several things we need to do to tackle the scourge of child poverty in places like Bishop Auckland, and I trust that the Government’s heart is in the right place on this issue. As such, I am delighted by the proposals they have brought forward and I will enthusiastically vote for the Bill. It will lift 450,000 children out of poverty. Some 2,310 households in my constituency are currently affected by the two-child cap.

As I said, the Bill is only one measure; it needs to be combined with others. We have heard often in this debate that removing the two-child cap is the single quickest way to lift children out of poverty. That is because we measure poverty by household income, but poverty is multi-dimensional, and it is important that we address its multifaceted aspects. Combined with other measures, the Bill will make a real difference. Those measures include: the Renters’ Rights Act 2025; the Employment Rights Act 2025; increases in the national minimum wage; the falling interest rates that are cutting mortgages; the new rules on school uniforms; the 30 hours of free childcare; free breakfast clubs in every school to reduce the early morning stress on working parents; the extension of free school meals to a further 4,500 children in Bishop Auckland; the extension of the warm home discount to more households; and investment in youth hubs, family hubs, and arts and culture. All those things will help to support children in poverty, which is why I am proud to be part of this Labour Government at this time.

At a roundtable in my constituency shortly after I was elected, we invited educators and charities—people who work with children—to talk to us about their experience of child poverty. There were tears in the room as headteachers talked of having to bring food into school to feed hungry children; of a child whose uniform was wet because there was no glass in the window of their home; of children living in cold and damp homes; and of children in Shildon who are excluded from extracurricular activities because they have to get the only free bus home, as their parents cannot afford the £1 bus fare to take a later bus. I came here today to speak on behalf of those children and to be their voice.

I will address some of the arguments that we have heard against the Bill. Too much of this debate has focused on party politics, rather than children. The Opposition seem to be simultaneously arguing that we should have done this sooner and should not be doing it at all. As I have engaged with the Government over the past 18 months and had many conversations, including in No. 10 and with Ministers, I have been reassured throughout that the Prime Minister has a strong personal commitment to eradicating child poverty, so it did not surprise me at all to see this legislation brought forward.

The opposition to what we are doing today is based on falsehoods. The first is that the Bill is about supporting children in workless households. As my hon. Friend the Member for Calder Valley (Josh Fenton-Glynn) said a moment ago, the children are not to blame. We can never blame a child for being born in a poor home. Also, 59% of the families affected by the two-child cap are families in work. We also know that universal credit requires people to show evidence of actively seeking work. People cannot simply sit on universal credit—it is not that easy. We know, too, that it is often a temporary measure.

I think about my family. Twelve years ago, I was working as a gardener on just above the minimum wage while I was completing my PhD, and my wife was working as a carer. We relied for a time on having our income topped up by tax credits, as they were called then. I almost crossed out that bit of my speech, because I know I will get an onslaught of abuse just for saying so, such is the rhetoric in our country right now, demonising people who ever draw on our social security system. My twin sister became a single parent, not of her choosing, and raised three children, two of whom had a disability. I remember her telling me that when she moved into her council house, a friend told her that she could paint the floor and put duvets at the windows to keep it warmer. My sister put herself through a degree in pharmacy at Durham University and now works in my constituency as a pharmacist for a GP practice. My brother, who was the highest earner in our family, died at the age of 35, leaving behind three children. People fall on hard times, and when they do, a caring society should be there for each other.

One of the other lies we are hearing in this debate is that the Bill is funded by a tax on workers. Other parties seek to divide people, telling those who are just about managing that their taxes are paying for people who are not working, and it is not true. We know what is funding this Bill and many other things: a fairer tax system, abolishing the non-dom status, a mansion tax, and the remote gaming duty, which will generate an extra £1 billion. It is about fairness and who pays.

Finally, there is this lie that keeping children in poverty is good or necessary for the economy. It is not. The welfare bill increased by £88 billion under the Conservative Government, despite the real value of welfare decreasing. They oversaw a real-terms decrease in living standards. That led to a generation of children who were malnourished, who experienced family breakdown and who were denied opportunities to become a generation of adults realising their full potential. We had an increase in sickness and in days lost to sick pay, an increase in mental health disorders and a 250% increase in looked-after children. We have rising cost pressures on Government as a result of those policies.

As I finish, I must turn my attention to the comments made by the hon. Member for Runcorn and Helsby (Sarah Pochin), who is no longer in her place. I intend to write to her, because I was deeply offended by the suggestion that people who were not born in this country, but work hard, are somehow less. My wife was not born in this country; she came here as a teenager. She worked in a meat factory and as a carer. More recently, she went through university and now works as a midwife in our NHS. I am so proud of her, and I find the idea disgusting that she should somehow be less entitled because of her birth. Reform needs to rethink that.

To conclude, I will be voting with the Government tonight, and I re-emphasise that this is one of several things that we need to do in our national mission to end the scourge of child poverty in our country once and for all.

--- Later in debate ---

[John Slinger]

It is perfectly acceptable and reasonable for a Government such as ours to take measures in Budgets to provide the resources necessary to enact a policy, as this Bill would do, that will lift so many children out of poverty. I think the hon. Member makes a fairly fatuous point, if I may say so.

[Sam Rushworth]

Does my hon. Friend share my confusion at the point that has just been made? Does it not illustrate that all of this is about choices, and that the choice that is being made on this side of the House is, yes, to increase the tax on gambling and on mansions in order to decrease child poverty? The choice that Reform would make would be to increase child poverty for 5p off a pint.

[John Slinger]

I am assuming that the hon. Member for Hinckley and Bosworth is opposing the policy before us today. So you actually do not want to take the measure that we are going to take—

--- Later in debate ---

[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.