By Terminating a Harsh Tory Social Experiment, This Financial Plan Clearly Outlines How Labour Will Fight the Struggle to Renew Britain

Just recently, the finance minister, Rachel Reeves, delivered a Labour budget. The public have been calling for Labour’s purpose and principles to be more distinctly expressed. Through the choices made – a shift to a fairer tax system, targeting wealth to pay for tackling child poverty, quality public services and the living expenses – 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 cries from the conservative side began immediately.

The Central Dividing Line in UK Government

The primary dividing line in British politics is once again on the economy. On the one hand Labour, who want to reform it so it helps everyday working people, and on the other, our political opponents, who favor the status quo and the failed ideology of the past. We must now confront, and win, the debate.

The Tories had 14 years to fix things and in reality, by every standard, they got far more dire. Their ideological austerity and supply-side economics – tax breaks for the wealthy, reducing investment (causing us with poor productivity and wages), and neglecting to support young people post-Covid – proved ineffective.

Legacy of Decline Under the Previous Administration

Living standards dropped by the biggest amount since records began, child poverty reached record levels, NHS waiting lists in England were the highest they’ve ever been, wages remained flat, a housing crisis became entrenched, young people scarred by Covid were abandoned. The history of failure continues.

A single budget alone can’t put all this right, so Labour has a long-term plan for rebuilding and for rewiring the country. And we have to go out and continue 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 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 deal with the effects instead of the solution.

That’s why we are constructing more social housing than for a generation, raising 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 drive for 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 enacted, poorer families with children have endured 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 has only served to push 300,000 more children into poverty – which, in the end, costs us more, as well as being heartless and unethical.

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 cramped, 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 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 almost 75% among wealthier families. This sets them up for the disadvantages they face during their lives: unrealized potential, economic struggles and ill health. Children who grew up in poverty are more likely to be unemployed or poor as adults.

Confronting 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 promptly 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 won’t happen overnight either, so acting early in the parliament was vital.

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

Fair Funding for Policies

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

Conclusion

Equity and purpose – that’s how we will succeed in the battle of ideas. This budget is a definitive statement that we gained the election as Labour, and will govern as Labour. As I consistently said during my campaign to become deputy leader, we must seize back the political megaphone and define the narrative more strongly about what’s really wrong with the country and how we are repairing it. We’ve certainly done that this week.

So let’s maintain it and prevail in this fight about how we will renew Britain and tackle the entrenched inequalities holding us back.