🔗 Share this article

Just recently, the chancellor, Rachel Reeves, presented a Labour Party budget. The public have been calling for Labour’s mission and principles to be more distinctly expressed. Through the choices made – a shift to a fairer tax system, targeting wealth to fund addressing child poverty, quality public services and the cost of living – we have clearly demonstrated what we stand for.

That’s why Labour MPs applauded in the Commons, and it’s why we are ready for the battles to come. And it’s why the cries from the right began immediately.

The Central Political Divide in UK Government

The central 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 political opponents, who support the current system and the failed doctrine of the past. We must now take on, and prevail in, the debate.

The Tories had 14 years to resolve things and in reality, by every standard, they got far more dire. Their doctrinaire austerity and supply-side economics – tax breaks for the wealthy, reducing investment (leaving us with poor productivity and wages), and failing to support young people after the pandemic – proved ineffective.

Legacy of Decline Under the Former Administration

Living standards dropped by the largest margin since records began, child poverty hit 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 abandoned. The history of failure goes on.

A single budget alone can’t put all this right, so Labour has a long-term 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 Youth Deprivation

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 is forced to paying more to deal with the effects instead of the cure.

That’s why we are constructing more social housing than for a generation, increasing wages and enhanced protections 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

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 introduced, poorer 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 affected 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 unethical.

Real Impact in Communities

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 real impact it’s had. Children wearing low-cost wellies as school shoes, children going to bed hungry and cold, living in cramped, 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 deep poverty.

Long-Term Effects of Child Poverty

Just a quarter of pupils from the most disadvantaged families achieve five good GCSEs, compared with nearly three in four among affluent families. This predisposes them for the challenges they face throughout their lives: unrealized potential, economic struggles and poor health. Children who grew up in poverty are more likely to be unemployed or poor as adults.

Confronting child poverty isn’t just a ethical duty, 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 expanding free school meals.

That’s why we acted urgently in the budget, despite the challenging economic context. Every day with this cap in place sees over a hundred extra 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 symbol to 14 years of unsuccessful conservative ideology. Now it is gone.

Equitable Financing for Policies

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

Final Thoughts

Fairness and direction – that’s how we will win 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 define the narrative more strongly 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 fight about how we will renew Britain and address the entrenched inequalities impeding progress.