Through Ending a Cruel Tory Welfare Policy, This Financial Plan Definitively Outlines How Labour Will Wage the Struggle to Renew Britain

Yesterday, the chancellor, Rachel Reeves, presented a Labour economic plan. People have been asking for Labour’s mission and values to be more clearly expressed. By way of the decisions made – a transition to a more equitable tax system, focusing on wealth to fund addressing child poverty, quality public services and the living expenses – we have unequivocally demonstrated what we stand for.

This is why Labour MPs cheered in the Commons, and it’s why we are ready for the fights to come. And it’s why the cries from the right began immediately.

The Central Political Divide in British Government

The central division in British politics is once again on the economy. On the one hand Labour, who want to reform it so it helps ordinary working people, and on the opposite side, our political opponents, who support the status quo and the failed doctrine of the past. We must now confront, and win, the debate.

The Tories were given 14 years to resolve things and in reality, by every standard, they got far more dire. Their doctrinaire austerity and supply-side economics – tax breaks for the wealthy, reducing investment (leaving us with poor productivity and wages), and failing to support young people after the pandemic – didn’t work.

Record of Failure Under the Former Government

Living standards fell 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 were stagnant, 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 fix everything, so Labour has a comprehensive plan for renewal and for rewiring the country. And we have to go out and continue making the argument for why our strategy will reap dividends.

Welfare Spending and Youth Deprivation

During the Tories, welfare spending rose substantially. As did child poverty, because they failed to tackle the underlying issues: low pay, high housing costs, significant inequalities in education, health and regions. The state is forced to paying more to deal with the effects instead of the cure.

That’s why we are constructing more affordable homes than for a generation, increasing wages and enhanced protections 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 pursue clean power.

Ending 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 introduced, low-income 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 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 immoral.

Tangible Effects in Local Areas

I know from my own constituency – 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, damp 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 deep poverty.

Lasting Consequences of Child Poverty

Just one in four pupils from the poorest families achieve five good GCSEs, compared with nearly three in four among affluent families. This predisposes them for the challenges they face throughout their lives: unrealized potential, economic 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.

This is the reason 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 benefits of lifting it won’t happen overnight either, so acting early in the parliament was vital.

The cap was a symbol to 14 years of failed rightwing ideology. Now it is abolished.

Fair Financing for Measures

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

Conclusion

Equity and direction – that’s how we will win the contest of ideas. This budget is a clear 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 define the narrative more strongly 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 renew Britain and address the entrenched inequalities impeding progress.