🔗 Share this article By Halting a Harsh Tory Welfare Policy, This Financial Plan Definitively Outlines How Labour Will Fight the Struggle to Renew Britain Yesterday, the chancellor, Rachel Reeves, presented a Labour budget. The public have been asking for Labour’s purpose and values to be more distinctly articulated. By way of the decisions made – a transition to a more equitable tax system, targeting wealth to pay for tackling child poverty, good public services and the living expenses – we have unequivocally demonstrated what we stand for. That’s why Labour MPs cheered 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 Government The central division in British politics is once again on the economy. On the one hand Labour, who aim to reform it so it helps 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 prevail in, the argument. The Tories had 14 years to resolve things and in reality, by any measure, they got much worse. Their ideological austerity and trickle-down economics – tax cuts for the wealthy, cutting off investment (causing us with poor productivity and wages), and failing to support young people after the pandemic – proved ineffective. Record of Failure Under the Previous Administration 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 became entrenched, young people scarred by Covid were left on the scrapheap. The history of failure continues. A single budget alone can’t fix everything, so Labour has a long-term plan for rebuilding and for restructuring the country. And we have to go out and keep making the argument for why our approach will yield benefits. Welfare Spending and Child Poverty Under the Tories, welfare spending significantly increased. As did child poverty, because they didn’t address the underlying issues: low pay, high housing costs, significant inequalities in education, health and regions. The state ends up paying more to manage the symptoms instead of the cure. It’s why we are constructing more affordable homes than for a generation, increasing wages and new rights for workers, massively boosting investment in infrastructure and new industries, getting waiting lists down and bringing down the costs of childcare and energy as we pursue 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, 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 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 immoral. Tangible Effects 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 real impact it’s had. Children wearing low-cost wellies as school shoes, children going to bed hungry and cold, living in overcrowded, mouldy homes, parents during the holidays depending 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 a quarter of pupils from the most disadvantaged families achieve five good GCSEs, compared with almost 75% among wealthier families. This sets them up 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 jobless 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 lifting the two-child cap, or expanding free school meals. This is the reason 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 taking early action in the parliament was vital. The cap was a symbol to 14 years of failed rightwing ideology. Now it is gone. Fair Financing for Measures We, as Labour, can also be explicit 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 succeed in the contest of ideas. This budget is a definitive statement that we won the election as Labour, and will lead as Labour. As I consistently said during my campaign to become deputy leader, we must seize back the political platform and set the agenda 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 maintain it and win this struggle about how we will rebuild Britain and address the entrenched inequalities holding us back.