Just recently, the chancellor, Rachel Reeves, delivered a Labour Party budget. The public have been calling for Labour’s mission and principles to be more clearly expressed. By way of the choices made – a shift to a more equitable tax system, focusing on wealth to fund addressing child poverty, good public services and the cost of living – we have clearly set out what we believe in.
That’s 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 Main Dividing Line in UK Politics
The primary division in British politics is once again on the economy. On the one hand Labour, who aim to reform it so it helps everyday working people, and on the opposite side, our political opponents, who support the current system and the unsuccessful doctrine 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, cutting off investment (leaving us with poor productivity and wages), and neglecting to support young people post-Covid – proved ineffective.
Legacy of Failure Under the Previous Administration
Quality of life fell by the biggest amount 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 long-term plan for rebuilding and for restructuring the country. And we have to go out and continue making the case for why our strategy will reap dividends.
Welfare Spending and Youth Deprivation
Under the Tories, welfare spending significantly increased. As did child poverty, because they failed to tackle the root causes: low pay, high housing costs, significant inequalities in education, health and regions. The state is forced to paying more to manage the symptoms instead of the cure.
That’s why we are constructing more affordable homes than for a generation, increasing wages and enhanced protections 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 drive for clean power.
Removing the Two-Child Limit
This is also the reason we are absolutely right to use this budget to lift the two-child benefit cap.
For almost a decade, since it was enacted, low-income families with children have suffered from a unjust social experiment that was branded as fair for working people when it was the opposite. Most of the families impacted 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 Communities
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 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 divert time and resources to supporting children who are living with the results of severe deprivation.
Lasting Effects of Youth Hardship
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 disadvantages they face during their lives: unrealized potential, economic struggles and poor health. Children who were raised in poverty are more likely to be jobless or poor as adults.
Addressing child poverty isn’t just a ethical duty, it is a long-term investment. Poverty costs the economy far, far more than the three billion pound cost of lifting the two-child cap, or expanding free school meals.
That’s why 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 will not occur 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 gone.
Equitable Financing for Policies
We, as Labour, can also be explicit that these measures are being paid for in a fair way – from a new gaming tax, closing tax loopholes and a new “mansion tax”.
Conclusion
Equity and purpose – that’s how we will succeed in the contest of ideas. This budget is a definitive 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 reclaim the political megaphone and set the agenda 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 keep hold of it and win this fight about how we will rebuild Britain and tackle the entrenched inequalities impeding progress.
