🔗 Share this article Through Terminating a Harsh Tory Welfare Policy, This Budget Definitively Outlines How the Labour Party Will Wage the Battle to Revitalize Britain Yesterday, the chancellor, Rachel Reeves, delivered a Labour economic plan. The public have been calling for Labour’s purpose and values to be more clearly articulated. Through the choices made – a shift to a fairer tax system, targeting wealth to pay for tackling child poverty, good public services and the living expenses – we have unequivocally set out what we believe in. This is 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 Dividing Line in British Politics The primary dividing line in British politics is yet again on the economy. On the one side Labour, who want to reform it so it helps everyday working people, and on the opposite side, our opponents, who support the status quo and the unsuccessful doctrine of the past. We must now confront, and win, the argument. The Tories were given 14 years to resolve things and instead, by every standard, they got much worse. Their ideological austerity and trickle-down economics – tax breaks for the wealthy, cutting off investment (leaving us with low productivity and wages), and neglecting to support young people after the pandemic – didn’t work. Record of Decline 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 remained flat, a housing crisis took hold, young people scarred by Covid were abandoned. The history of failure goes on. A single budget alone can’t fix everything, so Labour has a comprehensive plan for renewal and for restructuring the country. And we have to go out and continue making the argument for why our approach will yield benefits. Welfare Spending and Youth Deprivation Under 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 manage the symptoms instead of the cure. It’s why we are building more social housing than for a generation, increasing wages and enhanced protections 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 pursue clean power. Removing the Two-Child Limit It’s also why we are absolutely right to use this budget to lift the two-child benefit cap. For eight long years, since it was enacted, poorer families with children have endured from a unjust social experiment that was branded as fair for working people when it was the opposite. Most of the families affected by it have a parent in work. It’s done nothing but 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 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 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 redirect time and resources to supporting children who are living with the results of deep poverty. Long-Term Effects of Child Poverty Just one in four pupils from the most disadvantaged families achieve five good GCSEs, compared with nearly three in four among wealthier families. This predisposes them for the challenges they face during their lives: unrealized potential, economic struggles and poor health. Children who grew up in poverty are more likely to be unemployed or poor as adults. Confronting child poverty isn’t just a ethical duty, 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 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 effects of lifting it will not occur overnight either, so acting early in the parliament was crucial. The cap was a symbol to 14 years of unsuccessful rightwing ideology. Now it is abolished. Equitable Funding for Policies We, as Labour, can also be explicit that these initiatives are being funded in a fair way – from a new gaming tax, eliminating tax loopholes and a new “mansion tax”. Final Thoughts Equity and purpose – that’s how we will win the battle of ideas. This budget is a definitive 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 strongly about what’s really wrong with the country and how we are repairing it. We’ve definitely done that this week. So let’s keep hold of it and prevail in this struggle about how we will rebuild Britain and address the deep inequalities impeding progress.