🔗 Share this article

Yesterday, the chancellor, Rachel Reeves, delivered a Labour Party budget. The public have been asking for Labour’s mission and values to be more clearly articulated. Through the choices made – a transition to a more equitable tax system, focusing on wealth to pay for 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 applauded in the Commons, and it’s why we are up for the fights to come. And it’s why the cries from the right began right away.

The Main Dividing Line in British Government

The central dividing line in British politics is once again on the economy. On the one hand Labour, who want to change it so it benefits ordinary working people, and on the other, our opponents, who favor the current system and the failed doctrine of the past. We must now confront, and prevail in, the debate.

The Tories were given 14 years to fix things and in reality, by any measure, they got far more dire. Their ideological austerity and supply-side economics – tax breaks for the wealthy, reducing investment (leaving us with low productivity and wages), and neglecting to support young people after the pandemic – didn’t work.

Record of Decline Under the Former Administration

Quality of life dropped 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 remained flat, a housing crisis took hold, young people scarred 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 continue making the argument for why our strategy will reap dividends.

Social Security and Youth Deprivation

During the Tories, welfare spending significantly increased. 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 constructing more social housing than for a generation, raising wages and enhanced protections for workers, greatly increasing investment in infrastructure and new industries, getting waiting lists down and lowering the costs of childcare and energy as we drive for clean power.

Ending the Two-Child Benefit Cap

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 introduced, low-income 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 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 constituency – 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 £1 wellies as school shoes, children going to bed without food and cold, living in cramped, damp homes, parents during the holidays 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 divert time and resources to supporting children who are living with the consequences of deep poverty.

Long-Term Effects of Youth Hardship

Just one in four pupils from the poorest families achieve five good GCSEs, compared with almost 75% among wealthier families. This sets them up for the challenges they face during their lives: unrealized potential, economic struggles and ill health. Children who were raised in poverty are more likely to be jobless or poor as adults.

Confronting child poverty isn’t just a ethical duty, it is a long-term investment. 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 more than 100 extra children pushed into poverty. The effects of lifting it will not occur overnight either, so taking early action in the parliament was vital.

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

Equitable Financing for Policies

We, as Labour, can also be explicit that these initiatives are being funded in a fair way – from a new gaming tax, closing 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 truly flawed with the country and how we are fixing it. We’ve certainly done that this week.

So let’s maintain it and win this struggle about how we will rebuild Britain and tackle the deep inequalities holding us back.