Through Terminating a Cruel Tory Social Experiment, This Financial Plan Clearly Outlines How Labour Will Fight the Battle to Revitalize Britain

Yesterday, the chancellor, Rachel Reeves, delivered a Labour budget. People have been calling for Labour’s mission and values to be more clearly articulated. Through the choices made – a transition to a more equitable tax system, focusing on wealth to pay for tackling child poverty, quality public services and the living expenses – we have clearly set out what we stand for.

This is why Labour MPs applauded in the Commons, and it’s why we are up for the battles to come. And it’s why the protests from the right began immediately.

The Central Political Divide in UK Politics

The primary dividing line in British politics is once 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 ideology of the past. We must now take on, and prevail in, the debate.

The Tories had 14 years to resolve things and in reality, by any measure, they got much worse. Their ideological austerity and trickle-down economics – tax breaks for the wealthy, cutting off investment (leaving us with poor productivity and wages), and neglecting to support young people after the pandemic – didn’t work.

Legacy of Failure Under the Former Government

Quality of life fell by the largest margin since records began, child poverty reached record levels, NHS waiting lists in England were the highest on record, wages were stagnant, a housing crisis became entrenched, young people affected 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 renewal and for rewiring the country. And we have to go out and continue making the argument for why our strategy will yield benefits.

Welfare Spending and Youth Deprivation

During 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 is forced to paying more to deal with the symptoms instead of the cure.

It’s why we are building more affordable homes than for a generation, raising wages and new rights for workers, greatly increasing investment in infrastructure and new industries, reducing waiting lists down and lowering the costs of childcare and energy as we pursue clean power.

Removing the Two-Child Limit

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

For eight long years, since it was introduced, low-income 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 has only served to push 300,000 more children into poverty – which, ultimately, costs us more, as well as being heartless and immoral.

Real Impact 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 actual impact it’s had. Children wearing low-cost wellies as school shoes, children going to bed hungry and cold, living in cramped, damp homes, parents this Christmas 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 overburdened but have to divert time and resources to supporting children who are living with the results of severe deprivation.

Lasting Consequences of Youth Hardship

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 disadvantages they face during their lives: missed 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 future-oriented strategy. Poverty costs the economy far, far more than the £3bn cost of lifting the two-child cap, or expanding free school meals.

That’s why we acted urgently in the budget, despite the very difficult economic context. Every day with this cap in place sees over a hundred additional children pushed into poverty. The effects of lifting it won’t happen overnight either, so taking early action in the parliament was crucial.

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

Equitable Funding for Policies

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

Conclusion

Equity and direction – 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 platform and set the agenda more forcefully about what’s really wrong with the country and how we are fixing it. We’ve certainly done that this week.

So let’s keep hold of it and win this struggle about how we will rebuild Britain and tackle the deep inequalities impeding progress.