Through Halting a Cruel Tory Welfare Policy, This Budget Definitively Sets Out How Labour Will Fight the Struggle to Renew Britain

Yesterday, the chancellor, Rachel Reeves, delivered a Labour Party budget. People have been asking for Labour’s purpose and principles to be more clearly articulated. Through the decisions made – a transition to a more equitable tax system, focusing on wealth to fund 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 battles to come. And it’s why the protests from the conservative side began right away.

The Central Dividing Line in British Politics

The primary dividing line in British politics is once again on the economy. On the one hand Labour, who aim to change it so it helps ordinary working people, and on the opposite side, our political opponents, who favor 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 fix things and in reality, by every standard, they got far more dire. Their ideological austerity and supply-side economics – tax cuts for the wealthy, reducing investment (leaving us with poor productivity and wages), and failing to support young people after the pandemic – proved ineffective.

Legacy of Failure Under the Former Administration

Living standards dropped 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 were stagnant, a housing crisis took hold, young people affected by Covid were left on the scrapheap. The history of failure continues.

A single 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 strategy will yield benefits.

Social Security and Child Poverty

Under the Tories, welfare spending rose substantially. As did child poverty, because they didn’t address the underlying issues: 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 solution.

It’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, getting 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, poorer families with children have endured from a unjust social experiment that was branded as fair for working people when it was anything but. 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 immoral.

Tangible Effects 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 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 this Christmas 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 overburdened but have to redirect time and resources to supporting children who are living with the consequences of severe deprivation.

Lasting Effects of Child Poverty

Just a quarter of pupils from the poorest 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 unemployed or poor as adults.

Confronting child poverty isn’t just a moral imperative, it is a long-term investment. 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 urgently in the budget, despite the challenging economic context. Every day with this cap in place sees over a hundred extra children pushed into poverty. The effects of lifting it will not occur overnight either, so acting early in the parliament was crucial.

The cap was a totem to 14 years of failed conservative ideology. Now it is gone.

Equitable Financing for Measures

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

Final Thoughts

Fairness and purpose – that’s how we will succeed in the battle of ideas. This budget is a clear statement that we won the election as Labour, and will lead as Labour. As I repeatedly said during my campaign to become deputy leader, we must reclaim the political megaphone and define the narrative more strongly about what’s really wrong with the country and how we are fixing it. We’ve definitely done that this week.

So let’s keep hold of it and win this fight about how we will renew Britain and address the entrenched inequalities holding us back.