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

Yesterday, the finance minister, Rachel Reeves, presented a Labour Party 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, targeting wealth to pay for tackling 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 battles to come. And it’s why the protests from the right began immediately.

The Main Dividing Line in British Politics

The central dividing line in British politics is yet again on the economy. On the one side Labour, who want to reform it so it benefits ordinary 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 argument.

The Tories were given 14 years to fix things and instead, by any measure, they got much worse. Their ideological austerity and supply-side economics – tax breaks for the wealthy, cutting off investment (leaving us with low productivity and wages), and failing to support young people after the pandemic – proved ineffective.

Legacy of Decline Under the Former Government

Quality of life dropped by the biggest amount 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 affected by Covid were left on the scrapheap. The history of failure continues.

One budget alone can’t fix everything, so Labour has a comprehensive plan for rebuilding and for rewiring the country. And we have to go out and keep making the argument for why our strategy will yield benefits.

Social Security and Child Poverty

During 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 ends up paying more to deal with the symptoms instead of the solution.

That’s why we are constructing more social housing than for a generation, raising wages and new rights 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 pursue clean power.

Removing the Two-Child Benefit Cap

It’s also why we are absolutely right to use this budget to lift the two-child benefit cap.

For almost a decade, since it was introduced, poorer 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 affected 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 callous and immoral.

Real Impact in Communities

From experience from my own constituency – where over 5,000 children will be raised 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 without food and cold, living in overcrowded, mouldy 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 divert time and resources to supporting children who are living with the results of severe deprivation.

Long-Term Consequences 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 were raised in poverty are more likely to be jobless or poor as adults.

Confronting 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 extending 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 more than 100 additional 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 totem to 14 years of failed rightwing ideology. Now it is abolished.

Equitable Funding for Measures

We, as Labour, can also be clear that these initiatives are being funded in a fair way – from a new gambling levy, 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 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 seize back 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 maintain it and prevail in this fight about how we will renew Britain and tackle the deep inequalities holding us back.