Through Halting a Harsh Tory Welfare Policy, This Budget Clearly Outlines How the Labour Party Will Wage the Struggle to Renew Britain

Yesterday, the chancellor, Rachel Reeves, delivered a Labour Party budget. The public have been calling for Labour’s purpose and values to be more clearly articulated. Through the choices made – a shift to a more equitable tax system, targeting wealth to pay for tackling child poverty, quality public services and the cost of living – we have unequivocally demonstrated what we stand for.

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

The Central Political Divide in UK Politics

The central division in British politics is yet again on the economy. On the one hand Labour, who want to change it so it benefits everyday working people, and on the other, our opponents, who support the current system and the unsuccessful doctrine of the past. We must now confront, and prevail in, the debate.

The Tories were given 14 years to resolve 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 (causing us with low productivity and wages), and neglecting to support young people after the pandemic – proved ineffective.

Legacy of Decline Under the Previous Government

Quality of life 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 took hold, young people affected 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 rewiring the country. And we have to go out and keep making the argument for why our approach will yield benefits.

Social Security and Youth Deprivation

Under the Tories, welfare spending significantly increased. As did child poverty, because they failed to tackle the underlying issues: low pay, high housing costs, deep inequalities in education, health and regions. The state ends up paying more to manage the effects instead of the solution.

That’s why we are constructing more social housing than for a generation, increasing 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.

Ending the Two-Child Benefit Cap

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 enacted, poorer families with children have suffered 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’s done nothing but push 300,000 more children into poverty – which, ultimately, costs us more, as well as being callous and immoral.

Real Impact in Local Areas

I know from my own district – where over 5,000 children will be lifted out of poverty as a result of abolishing 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 overcrowded, mouldy homes, parents during the holidays depending 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 divert time and resources to supporting children who are living with the consequences of deep poverty.

Long-Term Consequences of Child Poverty

Just one in four pupils from the poorest 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: missed potential, economic struggles and poor health. Children who grew up in poverty are more likely to be unemployed or poor as adults.

Addressing child poverty isn’t just a ethical duty, it is a future-oriented strategy. Poverty costs the economy significantly more than the three billion pound cost of lifting the two-child cap, or expanding free school meals.

That’s why we acted promptly in the budget, despite the challenging economic context. Every day with this cap in place sees over a hundred additional children pushed into poverty. The benefits of lifting it won’t happen overnight either, so taking early action in the parliament was crucial.

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

Fair Financing for Measures

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

Final Thoughts

Equity and purpose – that’s how we will win the contest of ideas. This budget is a clear statement that we gained the election as Labour, and will lead as Labour. As I consistently said during my campaign to become deputy leader, we must reclaim the political platform and set the agenda more forcefully 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 struggle about how we will renew Britain and tackle the deep inequalities impeding progress.