Through Ending a Harsh Conservative Welfare Policy, This Budget Clearly Outlines How the Labour Party Will Fight the Struggle to Renew Britain

Yesterday, the chancellor, Rachel Reeves, presented a Labour economic plan. The public have been asking for Labour’s mission and values to be more distinctly expressed. Through the decisions made – a shift to a fairer tax system, targeting wealth to pay for addressing child poverty, good public services and the cost of living – we have unequivocally set out what we believe in.

This is why Labour MPs applauded in the Commons, and it’s why we are ready for the fights to come. And it’s why the cries from the conservative side began right away.

The Main Political Divide in UK Politics

The primary dividing line in British politics is yet again on the economy. On the one side Labour, who aim to change it so it benefits ordinary working people, and on the other, our political opponents, who support the current system and the unsuccessful ideology of the past. We must now confront, and prevail in, the argument.

The Tories were given 14 years to resolve things and in reality, by every standard, they got much worse. Their ideological austerity and supply-side economics – tax cuts for the wealthy, reducing investment (causing us with low productivity and wages), and neglecting to support young people post-Covid – didn’t work.

Legacy of Failure Under the Previous Administration

Living standards fell by the largest margin 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 left on the scrapheap. The history of failure goes on.

One budget alone can’t put all this right, so Labour has a comprehensive plan for renewal and for rewiring the country. And we have to go out and keep making the argument for why our approach will reap dividends.

Social Security and Youth Deprivation

During 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 building more affordable homes than for a generation, increasing wages and new rights for workers, greatly increasing investment in infrastructure and new industries, reducing waiting lists down and bringing down the costs of childcare and energy as we pursue clean power.

Removing the Two-Child Benefit Cap

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

For almost a decade, since it was introduced, poorer families with children have suffered from a unjust 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, ultimately, costs us more, as well as being callous and immoral.

Real Impact in Communities

From experience from my own district – where over 5,000 children will be lifted 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, damp homes, parents this Christmas 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 redirect time and resources to supporting children who are living with the results of severe deprivation.

Lasting Effects of Child Poverty

Just a quarter of pupils from the most disadvantaged families achieve five good GCSEs, compared with nearly three in four among wealthier families. This sets them up for the challenges they face during their lives: unrealized potential, financial struggles and ill health. Children who were raised 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 significantly more than the three billion pound cost of removing the two-child cap, or extending free school meals.

That’s why we acted promptly 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 benefits of lifting it won’t happen overnight either, so taking early action in the parliament was crucial.

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

Fair Funding for Measures

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

Conclusion

Fairness and direction – that’s how we will succeed in the battle of ideas. This budget is a clear statement that we gained the election as Labour, and will lead as Labour. As I repeatedly said during my campaign to become deputy leader, we must seize back 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 renew Britain and address the entrenched inequalities holding us back.