It is a privilege to open this Budget debate on a theme of paramount importance to our country: the cost of living crisis facing Britain’s families. Whatever our party, we should take a step back and think about the history of the last two decades since the financial crisis, during which we have seen: the stagnation of real wages, only this year getting back to their 2008 levels; the worst progress on living standards in the last Parliament since records began in the 1950s; an epidemic of in-work poverty such that, according to the Resolution Foundation, seven out of 10 families with children who live in poverty now have someone in work; home ownership falling from two thirds of young people in the early 1990s to less than half today; and the biggest rise in energy bills in generations earlier this decade when Russia invaded Ukraine, on top of public services facing strains as never before.
Each of those on their own would cause people to doubt whether this country really works for them. Together, they represent a perfect storm that makes people question their basic assumptions about our economy, society and country. This is the condition-of-Britain question of our time, and it is the backdrop against which this Government were elected 17 months ago. The mission—the driving purpose of this Government and this Budget—is to tackle that crisis. That starts from an understanding that this crisis is due to not accidental circumstances but a governing ideology, and that our response must be to change course in three ways.
First, we need to make fair choices that favour ordinary working people, not the rich and powerful, who have been favoured for too long. Secondly, we must invest in and rebuild our public services and infrastructure so that we never return to austerity, which was such a disaster for the social and economic fabric on which so many people rely. Thirdly, we must endeavour to change our economy so that it produces more good jobs at good wages that sustain a decent living for people, ending the hollowing out of our economy and our communities. That is what this Government are about; that is what this Budget seeks to deliver.
First, then, I want to talk about fair choices. An illuminating chart—I love charts—on page 33 of the Budget Red Book shows the impact of decisions since the 2024 autumn Budget. It shows the progressive approach of my right hon. Friend the Chancellor. It shows that every decile will be better off as a result of her measures, except the richest 10%, with the greatest gains as a percentage of income to lower and middle-income families. That includes raising the national living wage and the national minimum wage, freezing rail fares for the first time in 30 years and freezing prescription charges, as well as two measures I want to focus on.
The first measure is lifting the two-child limit in universal credit, which goes to the heart of the affordability crisis that so many face. I think we need to have a debate about this issue. According to a Department for Work and Pensions document published on the day of the Budget, since its introduction in 2017, the two-child cap has put 300,000 children into relative poverty. That is the equivalent, as the document says, of 100 children every single day—more than three primary school classes each day being pushed into poverty. It is also part of a wider picture. According to the Joseph Rowntree Foundation, 7.1 million low-income households—one in four across the UK—have gone without essentials in the last six months, in one of the richest countries in the world. That is why we have acted on the two-child limit. Two million children will be helped, and 450,000 fewer children will be in poverty by the end of the Parliament.