🔗 Share this article

Just recently, the finance minister, Rachel Reeves, presented a Labour budget. People have been asking for Labour’s purpose and principles to be more distinctly articulated. By way of the choices made – a shift to a more equitable tax system, targeting wealth to pay for addressing child poverty, quality 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 up for the battles to come. And it’s why the protests 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 side Labour, who aim to reform it so it benefits ordinary working people, and on the opposite side, our opponents, who favor the current system and the failed doctrine of the past. We must now take on, and win, the debate.

The Tories were given 14 years to resolve things and instead, 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 poor productivity and wages), and neglecting to support young people post-Covid – proved ineffective.

Legacy of Decline Under the Former Government

Quality of life dropped by the largest margin since records began, child poverty reached record levels, NHS waiting lists in England were the highest on record, wages were stagnant, a housing crisis took hold, young people scarred by Covid were abandoned. The record 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 case for why our strategy will reap dividends.

Social Security 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, deep inequalities in education, health and regions. The state ends up paying more to deal with the symptoms instead of the cure.

It’s why we are building more affordable homes than for a generation, increasing wages and new rights 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.

Removing the Two-Child Limit

It’s also why we are completely justified to use this budget to remove the two-child benefit cap.

For almost a decade, since it was introduced, low-income families with children have suffered from a cruel social experiment that was marketed 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 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 £1 wellies as school shoes, children going to bed without food and cold, living in cramped, mouldy 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 stretched but have to redirect time and resources to supporting children who are living with the consequences of severe deprivation.

Lasting Consequences of Child Poverty

Just one in four pupils from the poorest families achieve five good GCSEs, compared with nearly three in four among wealthier families. This sets them up for the disadvantages 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.

Confronting child poverty isn’t just a ethical duty, it is a long-term investment. Poverty costs the economy far, far more than the £3bn 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 extra children pushed into poverty. The effects of lifting it won’t happen overnight either, so acting early in the parliament was crucial.

The cap was a symbol to 14 years of failed conservative ideology. Now it is abolished.

Equitable Funding for Policies

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

Final Thoughts

Equity 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 reclaim the political megaphone and set the agenda more strongly about what’s truly flawed with the country and how we are repairing it. We’ve definitely done that this week.

So let’s maintain it and win this fight about how we will renew Britain and address the entrenched inequalities impeding progress.