🔗 Share this article

Yesterday, the finance minister, Rachel Reeves, delivered a Labour Party budget. The public have been asking for Labour’s mission and values to be more clearly expressed. By way of the choices made – a transition to a more equitable tax system, focusing on wealth to fund tackling child poverty, good public services and the living expenses – we have clearly set out what we believe in.

That’s why Labour MPs cheered in the Commons, and it’s why we are up for the fights to come. And it’s why the cries from the conservative side began immediately.

The Central Political Divide in UK Government

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

The Tories had 14 years to resolve things and instead, by every standard, they got much worse. Their doctrinaire austerity and trickle-down economics – tax breaks for the wealthy, reducing investment (causing us with low productivity and wages), and neglecting to support young people after the pandemic – didn’t work.

Legacy of Decline Under the Former Government

Quality of life dropped 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 history of failure goes on.

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 approach will reap dividends.

Welfare Spending and Child Poverty

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

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

Removing the Two-Child Benefit Cap

This is also the reason we are absolutely right to use this budget to lift the two-child benefit cap.

For eight long years, since it was enacted, poorer families with children have suffered from a cruel social experiment that was marketed as fair for working people when it was the opposite. Most of the families impacted by it have a parent in work.

It has only served to push 300,000 more children into poverty – which, in the end, costs us more, as well as being heartless and immoral.

Real Impact in Local Areas

I know from my own constituency – where over 5,000 children will be lifted out of poverty as a result of ending the cap – the real impact it’s had. Children wearing £1 wellies as school shoes, children going to bed hungry and cold, living in overcrowded, damp 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 stretched but have to divert time and resources to supporting children who are living with the results of severe deprivation.

Long-Term Consequences of Child Poverty

Just a quarter of pupils from the most disadvantaged families achieve five good GCSEs, compared with almost 75% among wealthier families. This predisposes them for the disadvantages they face throughout their lives: unrealized potential, economic struggles and poor 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 significantly more than the £3bn cost of removing the two-child cap, or expanding free school meals.

This is the reason we acted urgently 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 taking early action in the parliament was crucial.

The cap was a symbol to 14 years of failed conservative ideology. Now it is abolished.

Fair Financing for Measures

We, as Labour, can also be explicit that these measures are being paid for in a fair way – from a new gambling levy, closing tax loopholes and a new “mansion tax”.

Final Thoughts

Fairness and direction – that’s how we will succeed in the battle of ideas. This budget is a clear statement that we won the election as Labour, and will govern as Labour. As I repeatedly said during my campaign to become deputy leader, we must reclaim the political megaphone and define the narrative more strongly about what’s really wrong with the country and how we are repairing it. We’ve definitely done that this week.

So let’s keep hold of it and win this struggle about how we will renew Britain and address the deep inequalities impeding progress.