By Halting a Harsh Conservative Social Experiment, This Financial Plan Clearly Sets Out How the Labour Party Will Fight the Battle to Renew Britain

Just recently, the finance minister, Rachel Reeves, presented a Labour Party economic plan. People have been asking for Labour’s mission and principles to be more clearly articulated. By way of the choices made – a shift to a more equitable tax system, targeting wealth to fund addressing child poverty, quality public services and the living expenses – we have clearly 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 protests from the right began right away.

The Main Political Divide in UK Government

The primary dividing line in British politics is yet again on the economy. On the one hand Labour, who aim to change it so it benefits ordinary working people, and on the other, our political opponents, who favor the status quo and the unsuccessful ideology of the past. We must now confront, and prevail in, the argument.

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

Legacy of Decline Under the Previous Administration

Living standards fell by the biggest amount 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 rebuilding and for rewiring the country. And we have to go out and keep making the case for why our strategy will yield benefits.

Social Security and Child Poverty

Under the Tories, welfare spending rose substantially. As did child poverty, because they didn’t address the root causes: low pay, high housing costs, deep inequalities in education, health and regions. The state ends up paying more to manage the effects instead of the solution.

It’s why we are building more affordable homes than for a generation, raising wages and enhanced protections 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

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

For eight long years, 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 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 Communities

I know from my own district – where over 5,000 children will be raised 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 without food and cold, living in cramped, damp homes, parents during the holidays depending on food banks for a simple 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 Consequences of Youth Hardship

Just a quarter of pupils from the poorest families achieve five good GCSEs, compared with nearly three in four among affluent families. This predisposes them for the disadvantages they face throughout their lives: missed potential, financial struggles and ill health. Children who grew up in poverty are more likely to be jobless or poor as adults.

Confronting child poverty isn’t just a moral imperative, it is a future-oriented strategy. Poverty costs the economy significantly more than the three billion pound cost of removing 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 more than 100 extra 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 unsuccessful rightwing ideology. Now it is gone.

Equitable Funding for Measures

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

Final Thoughts

Fairness and direction – that’s how we will win the contest of ideas. This budget is a clear statement that we won the election as Labour, and will lead as Labour. As I consistently said during my campaign to become deputy leader, we must reclaim the political megaphone 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 renew Britain and tackle the entrenched inequalities impeding progress.