🔗 Share this article

Yesterday, the chancellor, Rachel Reeves, presented a Labour Party budget. The public have been asking for Labour’s purpose and values to be more clearly expressed. By way of the choices made – a shift to a more equitable tax system, targeting wealth to fund addressing child poverty, good public services and the cost of living – we have clearly demonstrated what we believe in.

That’s why Labour MPs applauded in the Commons, and it’s why we are up for the fights to come. And it’s why the protests from the conservative side began right away.

The Main Dividing Line in British Politics

The primary dividing line in British politics is once again on the economy. On the one side Labour, who want to change it so it benefits ordinary working people, and on the opposite side, our opponents, who favor the status quo and the unsuccessful ideology of the past. We must now take on, and prevail in, the argument.

The Tories were given 14 years to resolve things and in reality, by every standard, they got much worse. Their ideological austerity and trickle-down economics – tax cuts for the wealthy, reducing investment (causing us with low productivity and wages), and neglecting to support young people after the pandemic – proved ineffective.

Record of Decline Under the Former Government

Quality of life fell by the biggest amount since records began, child poverty hit record levels, NHS waiting lists in England were the highest they’ve ever been, wages were stagnant, a housing crisis became entrenched, young people affected by Covid were abandoned. The history of failure continues.

One budget alone can’t fix everything, so Labour has a long-term plan for renewal and for rewiring the country. And we have to go out and continue making the case for why our approach will yield benefits.

Welfare Spending and Child Poverty

Under the Tories, welfare spending rose substantially. As did child poverty, because they didn’t address the root causes: low pay, high housing costs, significant inequalities in education, health and regions. The state ends up paying more to manage the effects instead of the cure.

It’s why we are building more affordable homes than for a generation, increasing wages and enhanced protections for workers, massively boosting 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.

Ending the Two-Child Limit

It’s also why we are completely justified 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 unjust social experiment that was marketed as fair for working people when it was anything but. 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 heartless and unethical.

Tangible Effects in Local Areas

I know from my own district – 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 without food and cold, living in overcrowded, mouldy homes, parents this Christmas relying on food banks for a simple 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 redirect time and resources to supporting children who are living with the consequences of severe deprivation.

Long-Term Effects of Child Poverty

Just one in four pupils from the poorest families achieve five good GCSEs, compared with almost 75% among affluent families. This sets them up for the challenges 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 long-term investment. Poverty costs the economy significantly more than the three billion pound cost of removing the two-child cap, or extending free school meals.

This is the reason we acted urgently in the budget, despite the challenging economic context. Every day with this cap in place sees over a hundred additional children pushed into poverty. The benefits of lifting it won’t happen overnight either, so acting early in the parliament was vital.

The cap was a symbol to 14 years of unsuccessful conservative ideology. Now it is gone.

Fair Financing for Measures

We, as Labour, can also be clear that these initiatives are being funded in a fair way – from a new gambling levy, eliminating tax loopholes and a new “mansion tax”.

Conclusion

Equity and direction – that’s how we will win the contest of ideas. This budget is a definitive 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 platform and define the narrative more forcefully about what’s really wrong with the country and how we are repairing it. We’ve certainly done that this week.

So let’s keep hold of it and prevail in this struggle about how we will rebuild Britain and address the deep inequalities holding us back.