Universal Credit (Removal of Two Child Limit) Bill [HL]

Third Reading

Motion

Moved by

That the Bill do now pass.

My Lords, I request your Lordships’ patience for a few minutes as I make a few remarks. I express my deep gratitude to all those who have supported this Private Member’s Bill and the effort to remove the two-child limit. I thank those across all Benches who have contributed during the passage of the Bill. I particularly thank the noble Baroness, Lady Stedman-Scott, who, for much of the time I sought to highlight the wrong of the two-child limit, was the Minister who had to respond. She was always willing to engage and debate with me. We did not reach agreement, but I publicly thank her for the way that she worked with me.

I recognise particularly the work of the Child Poverty Action Group, the Joseph Rowntree Foundation, the North East Child Poverty Commission, and their staff, who have provided valuable support and encouragement throughout this process. I publicly thank my two parliamentary assistants who have worked with me on the Bill, Emily King and Becky Plummer. They have been superb. I also thank Kim Johnson MP, who has agreed to take the Bill forward in the other place, and many other MPs who have already promised their support.

In less than two weeks, it will be the six-year anniversary of the introduction of the two-child limit, restricting universal credit support to only the first two children in a family. The policy was originally introduced to ensure that

“people on benefit should face the same choices as those in work and those not on benefits”,

while driving real action to

“make the biggest difference to the most disadvantaged children now and in future.”—[Official Report, Commons, 20/7/15; cols. 1258-63.]

It has indeed made a difference to those children’s lives, though regrettably not the one that was intended. While the policy aimed to address the root causes of poverty, the two-child limit has instead become the greatest contributor to driving more children into poverty. It impacts an estimated 1.3 million children, disproportionately affecting children of certain religions and ethnic-minority backgrounds.

My Lords, I speak on behalf of my noble friend Lady Sherlock, who cannot be here today due to ill health. I will not detain the House for long, but I commend the right reverend Prelate on the perseverance he has shown in raising this issue with Ministers in every conceivable way, in Oral Questions and debates, by publishing reports, in meetings with Ministers, and now through a Private Member’s Bill. In doing so, he has given us the chance not just to discuss the important issue of the two-child limit but to highlight the growing problem of child poverty in Britain today. Sending the Bill to the other place will now give MPs the opportunity to reflect on the important issues it raises. However, before the Bill reaches them, it may be helpful if Ministers could do two things.

First, Ministers can clarify what they are trying to achieve through this policy, because it has felt a bit of a slippery target. It was initially about saving money to reduce the deficit, even though evidence now shows that the money the coalition Government saved on benefit cuts was then spent on tax cuts. Then it was about being fair to those in work, even though the two-child limit affects in-work benefits such as universal credit, and then, at least implicitly, it was to affect decisions on how many children people have. Since the evidence suggests that people hit by the two-child limit are not having any fewer children, and since most people hit are in work, can the Minister tell the House whether the policy has been a success?

Secondly, the right reverend Prelate asked at Second Reading whether the Government would introduce an impact assessment. That is not unreasonable, given that the policy has now been in operation for over six years. The then Minister, the noble Baroness, Lady Stedman-Scott, replied:

“To be truthful and straightforward, I cannot commit to an impact assessment. I do not believe, with what I know, that the Government would welcome from me the request that he has made”.—[Official Report, 8/7/22; col. 1228.]

My Lords, I am grateful to the right reverend Prelate for bringing the Bill to the House and giving us the opportunity to debate this important issue, and I thank those who have participated and engaged on the Bill.

The Government think that it is of utmost importance to support children and families and are committed to helping parents into work. That requires a balanced system that provides strong work incentives and support for those who need it, but which ensures a sense of fairness to the taxpayer and many working families who do not see their incomes rise when they have more children. We believe that the policy to support a maximum of two children is a proportionate way to achieve these objectives. That our overall approach is working is evidenced by the fact that, between 2016 and 2022, the number of people in couples with children in employment has increased by 372,000—a 2.7 percentage point increase in the employment rate for this group. However, we recognise that some claimants are not able to make the same choices about the number of children in their family. That is why exceptions have been put in place to protect certain groups.

Child benefit may be paid for all children, plus the additional amount in child tax credit or indeed universal credit for any qualifying disabled children or qualifying disabled young people. Additional help for eligible childcare costs through working tax credit and universal credit is available, regardless of the total number of children in the household.

The most suitable way to lift children out of poverty is by supporting parents into, and to progress in, work wherever possible. The Government have consistently said that the best way to support people’s living standards is through good work, better skills and higher wages. The reduction in the universal credit taper rate and the £500 increase to the work allowance, in addition to the normal benefits uprating, alongside the landmark Kickstart and Restart schemes, demonstrated my department’s commitment to supporting families to move into or to progress in work.

I thank the noble Lord, Lord Kennedy, and the Minister for their comments, and I thank the Minister for agreeing to feed back about the impact assessment—that would be very helpful. It would serve the Government well to respond to all the reports that keep coming from the organisations that show how damaging this policy is in terms of increasing the number of children in poverty. This is not the time to reopen the debate, but the Minister will not be surprised to hear that I am not going to let this go.

Bill passed and sent to the Commons.