🔗 Share this article

Just recently, the chancellor, Rachel Reeves, presented a Labour Party economic plan. People have been calling for Labour’s mission and values to be more clearly expressed. Through the decisions made – a shift to a fairer tax system, targeting wealth to fund tackling child poverty, good public services and the cost of living – we have unequivocally set out what we believe in.

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

The Central Political Divide in UK Politics

The primary dividing line in British politics is yet again on the economy. On the one hand Labour, who aim to reform it so it helps everyday working people, and on the other, our opponents, who favor the current system and the unsuccessful doctrine of the past. We must now confront, and win, the debate.

The Tories were given 14 years to fix things and in reality, 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 Previous Administration

Living standards fell by the biggest amount 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 scarred by Covid were abandoned. The history 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 keep making the argument for why our approach will reap dividends.

Welfare Spending and Youth Deprivation

Under the Tories, welfare spending rose substantially. As did child poverty, because they failed to tackle the root causes: low pay, high housing costs, deep inequalities in education, health and regions. The state is forced to paying more to manage the effects instead of the cure.

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

Removing the Two-Child Benefit Cap

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

For eight long years, since it was enacted, poorer families with children have endured from a cruel social experiment that was branded as fair for working people when it was anything but. 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 callous and unethical.

Real Impact in Local Areas

I know from my own district – where over 5,000 children will be raised out of poverty as a result of ending 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, damp homes, parents during the holidays relying 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 redirect time and resources to supporting children who are living with the results 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 almost 75% among affluent families. This sets them up for the disadvantages they face throughout their lives: missed potential, economic struggles and ill health. Children who were raised in poverty are more likely to be unemployed 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 three billion pound cost of removing the two-child cap, or extending free school meals.

That’s why 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 gone.

Equitable Financing for Policies

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

Conclusion

Fairness and direction – that’s how we will win the battle of ideas. This budget is a clear 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 define the narrative more strongly about what’s really wrong 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 struggle about how we will renew Britain and address the entrenched inequalities holding us back.