🔗 Share this article

Yesterday, the finance minister, Rachel Reeves, delivered a Labour Party budget. People have been calling for Labour’s mission and values to be more clearly expressed. Through the choices made – a shift to a fairer tax system, targeting wealth to fund addressing child poverty, good public services and the cost of living – we have clearly set out what we stand for.

This is why Labour MPs cheered in the Commons, and it’s why we are ready for the fights to come. And it’s why the cries from the conservative side began right away.

The Main Dividing Line in UK Politics

The central dividing line in British politics is yet again on the economy. On the one hand Labour, who want to change it so it helps everyday working people, and on the other, our political opponents, who favor the status quo and the unsuccessful doctrine of the past. We must now take on, and prevail in, the debate.

The Tories were given 14 years to fix things and in reality, by any measure, they got much worse. Their doctrinaire austerity and supply-side economics – tax cuts for the wealthy, reducing investment (causing us with poor productivity and wages), and neglecting to support young people after the pandemic – didn’t work.

Record of Failure Under the Former Government

Quality of life fell by the biggest amount since records began, child poverty reached record levels, NHS waiting lists in England were the highest on record, wages were stagnant, a housing crisis became entrenched, young people affected by Covid were left on the scrapheap. The record of failure goes on.

One budget alone can’t put all this right, so Labour has a comprehensive plan for rebuilding and for restructuring the country. And we have to go out and continue making the argument for why our strategy will yield benefits.

Welfare Spending and Youth Deprivation

During the Tories, welfare spending rose substantially. As did child poverty, because they failed to tackle the root causes: low pay, high housing costs, significant inequalities in education, health and regions. The state is forced to paying more to deal with the symptoms instead of the solution.

It’s why we are constructing more social housing than for a generation, raising wages and enhanced protections for workers, massively boosting investment in infrastructure and new industries, reducing waiting lists down and lowering the costs of childcare and energy as we drive for clean power.

Ending the Two-Child Limit

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

For almost a decade, since it was introduced, poorer families with children have endured from a cruel 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, in the end, costs us more, as well as being heartless and immoral.

Real Impact in Local Areas

From experience from my own district – where over 5,000 children will be lifted out of poverty as a result of ending the cap – the actual impact it’s had. Children wearing low-cost wellies as school shoes, children going to bed without food and cold, living in cramped, mouldy homes, parents this Christmas depending 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 stretched but have to redirect time and resources to supporting children who are living with the results of severe deprivation.

Long-Term Effects of Youth Hardship

Just a quarter of pupils from the poorest families achieve five good GCSEs, compared with almost 75% among affluent families. This predisposes them for the challenges they face during 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 ethical duty, it is a future-oriented strategy. Poverty costs the economy far, far more than the three billion pound cost of removing the two-child cap, or expanding 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 extra children pushed into poverty. The benefits of lifting it will not occur overnight either, so taking early action in the parliament was crucial.

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

Fair Financing for Measures

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

Conclusion

Equity and purpose – that’s how we will succeed in the battle of ideas. This budget is a definitive statement that we won the election as Labour, and will lead as Labour. As I repeatedly said during my campaign to become deputy leader, we must reclaim the political platform and set the agenda more strongly about what’s truly flawed with the country and how we are fixing it. We’ve certainly done that this week.

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