🔗 Share this article

Yesterday, the finance minister, Rachel Reeves, delivered a Labour budget. The public have been calling for Labour’s mission and principles to be more clearly articulated. By way of the decisions made – a shift to a more equitable tax system, targeting wealth to fund addressing child poverty, quality public services and the cost of living – we have clearly set out what we stand for.

This is why Labour MPs applauded in the Commons, and it’s why we are ready for the battles to come. And it’s why the protests from the conservative side began immediately.

The Main Political Divide in UK Politics

The primary division in British politics is once again on the economy. On the one side Labour, who aim to reform it so it benefits ordinary working people, and on the other, our political opponents, who support the status quo and the failed ideology of the past. We must now take on, and prevail in, the debate.

The Tories were given 14 years to resolve things and in reality, by every standard, they got much worse. Their ideological austerity and supply-side economics – tax cuts for the wealthy, cutting off investment (causing us with poor productivity and wages), and neglecting to support young people post-Covid – didn’t work.

Legacy of Failure Under the Former Government

Living standards fell by the biggest amount since records began, child poverty reached record levels, NHS waiting lists in England were the highest they’ve ever been, wages were stagnant, a housing crisis took hold, young people scarred by Covid were left on the scrapheap. The record of failure continues.

One budget alone can’t fix everything, so Labour has a comprehensive plan for rebuilding and for rewiring the country. And we have to go out and keep making the argument for why our strategy will reap dividends.

Welfare Spending and Child Poverty

During the Tories, welfare spending significantly increased. As did child poverty, because they didn’t address the underlying issues: low pay, high housing costs, deep inequalities in education, health and regions. The state is forced to paying more to manage the symptoms instead of the solution.

It’s why we are building more affordable homes than for a generation, increasing wages and enhanced protections for workers, greatly increasing investment in infrastructure and new industries, reducing waiting lists down and bringing down the costs of childcare and energy as we drive for clean power.

Removing the Two-Child Limit

It’s also why we are absolutely right to use this budget to lift the two-child benefit cap.

For almost a decade, since it was enacted, low-income families with children have suffered from a unjust social experiment that was branded as fair for working people when it was the opposite. Most of the families impacted by it have a parent in work.

It’s done nothing but push 300,000 more children into poverty – which, ultimately, costs us more, as well as being callous and unethical.

Real Impact in Local Areas

I know from my own constituency – where over 5,000 children will be raised out of poverty as a result of abolishing the cap – the actual impact it’s had. Children wearing £1 wellies as school shoes, children going to bed hungry and cold, living in overcrowded, mouldy homes, parents during the holidays depending on food banks for a modest meal or small gift for their kids.

I also see the impact on schools, teachers, social workers, doctors and charities who are already overburdened but have to divert time and resources to supporting children who are living with the consequences of deep poverty.

Lasting Effects of Youth Hardship

Just one in four pupils from the poorest families achieve five good GCSEs, compared with nearly three in four among affluent families. This sets them up for the disadvantages they face during their lives: missed potential, economic struggles and ill health. Children who were raised in poverty are more likely to be jobless or poor as adults.

Addressing child poverty isn’t just a moral imperative, it is a future-oriented strategy. Poverty costs the economy far, far more than the £3bn cost of removing the two-child cap, or extending free school meals.

That’s why we acted promptly in the budget, despite the very difficult economic context. Every day with this cap in place sees over a hundred additional children pushed into poverty. The effects of lifting it will not occur overnight either, so acting early in the parliament was crucial.

The cap was a totem to 14 years of unsuccessful rightwing ideology. Now it is abolished.

Fair Funding for Policies

We, as Labour, can also be explicit that these initiatives are being funded in a just way – from a new gaming tax, eliminating tax loopholes and a new “mansion tax”.

Conclusion

Fairness and purpose – that’s how we will win the contest of ideas. This budget is a definitive statement that we gained the election as Labour, and will govern as Labour. As I consistently said during my campaign to become deputy leader, we must seize back the political platform and set the agenda more forcefully about what’s truly flawed with the country and how we are repairing it. We’ve definitely done that this week.

So let’s maintain it and prevail in this struggle about how we will renew Britain and address the entrenched inequalities holding us back.