A Budget that finally turns the tide – but we must go further

Rachel Reeves’ recent Budget marks a turning point – not just in policy, but in political morality. 

After years of tireless campaigning from MPs, charities and anti-poverty organisations, the government has finally scrapped the cruel and indefensible two-child cap. It is a victory built upon persistence and truth-telling. This is a reversal that will change the lives of hundreds of thousands of children across Britain.

For those of us who fought this battle inside and outside Parliament, the relief is real. Seven of my Labour colleagues were wrongfully suspended for voting against this policy over a year ago. Their courage was punishment and today, their moral stance has been vindicated – and the country’s most vulnerable children will benefit from their actions.

But while this is a hard-won triumph, it is only the beginning of what must be a bolder, more ambitious mission to eradicate poverty and inequality. The two-child limit was one of the most punitive welfare polices ever implemented in the UK. It forced families into hardship simply based on how many children they had – ignoring the realities of insecure work, low pay and rising cost of living. It was a Tory policy founded on stigma, not evidence.

With its abolition, over 40,000 across Merseyside will feel the benefits. This is not an abstract figure – these are real families whose daily struggles will now ease. In my Liverpool Riverside constituency, the impact is even greater. Last year alone, 4,350 children were hit by the cap – 26% of all local children, one of the highest proportions anywhere in Britain. That means over a quarter of the young people growing up in my communities were being deliberately pushed deeper in poverty.

Their parents were often working – and this is where opposition narrative collapses entirely. Around 70% of families affected by the cap are working families, but even more damning is the broader trend: 70% of families in poverty now have at least one parent in work, up from just 49% in 2000. This is a national trajectory that tells a simple truth – work is no longer a guaranteed route out of poverty.

These shocking figures shatter the political fiction that poverty stems from laziness or a lack of effort. Rather, they expose a labour market built in exploitation, insecurity and low pay. Families are grafting harder than ever and still being dragged under by broken systems that reward wealth over work. We have a welfare system that is propping up the private sector profiting from low wages.

Lifting the cap is therefore not just a change in welfare – it is a moral correction. It acknowledges that children should never be the brunt of political point-scoring. It also recognises that a prosperous society invests in its young people, and it does not impoverish them. These children are our future wealth creators, innovators and leaders. Supporting them now inevitably strengthens us for decades to come.

The Chancellor told us, “I would cut the cost of living, and I meant it” – an acknowledgement that people across the country are struggling. She is right to recognise that families feel squeezed from everyday angle of their everyday lives: rising rents, soaring food bills, stagnant wages and essential services stretched to breaking point.

There were important steps in the Budget beyond the two-child cap. Increased support for children, extensions to free school provision and targeted support for low- income households all represent a step in the right direction. These are certainly wins worth celebrating.

But we must be honest: the Budget could have gone much further.

If this government genuinely wants to tackle the cost-of-living crisis, it cannot ignore the structural inequalities that are driving it. We are in a country where banking profits continue to soar while families skip meals; where landlords are enjoying record returns while tenants face skyrocketing, unregulated rents; where corporate excess is tolerated but workers are expected to tighten their belts. In my view, the Budget lacked the ambition needed to fundamentally shift that balance.

For all its positives, this Budget still falls short of the structural reforms Britain urgently needs. It failed to introduce rent controls to protect tenants from spiralling housing costs, or a wealth tax to ensure that the richest contribute their fair share at a time of national need. It avoided any move toward public ownership of key services like energy, leaving families vulnerable to profiteering, and offered no serious programme of redistributive taxation that would shift the burden away from working households and onto unearned wealth.