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Just recently, the finance minister, Rachel Reeves, delivered a Labour economic plan. People have been calling for Labour’s purpose and values to be more clearly articulated. Through the choices made – a transition to a more equitable tax system, focusing on wealth to fund tackling child poverty, good public services and the living expenses – we have clearly demonstrated what we believe in.

That’s 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 right away.

The Main Dividing Line in UK Government

The central dividing line in British politics is once again on the economy. On the one hand Labour, who want to reform it so it helps everyday working people, and on the other, our opponents, who support the status quo and the unsuccessful ideology of the past. We must now confront, and prevail in, the debate.

The Tories were given 14 years to resolve things and instead, by any measure, they got much worse. Their doctrinaire austerity and trickle-down economics – tax cuts for the wealthy, reducing investment (leaving us with poor productivity and wages), and neglecting to support young people after the pandemic – proved ineffective.

Legacy of Failure Under the Former Administration

Quality of life dropped by the largest margin since records began, child poverty hit record levels, NHS waiting lists in England were the highest on record, wages remained flat, a housing crisis became entrenched, young people affected by Covid were left on the scrapheap. The history of failure goes on.

A single budget alone can’t put all this right, 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 yield benefits.

Social Security and Youth Deprivation

Under the Tories, welfare spending significantly increased. As did child poverty, because they didn’t address 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 cure.

It’s why we are building more social housing than for a generation, increasing wages and enhanced protections for workers, massively boosting investment in infrastructure and new industries, reducing waiting lists down and bringing down the costs of childcare and energy as we pursue clean power.

Ending the Two-Child Limit

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 enacted, low-income families with children have suffered from a unjust social experiment that was marketed as fair for working people when it was the opposite. 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 callous and unethical.

Real Impact in Communities

I know from my own constituency – where over 5,000 children will be lifted 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 hungry and cold, living in overcrowded, damp homes, parents during the holidays relying 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 overburdened but have to redirect time and resources to supporting children who are living with the consequences of severe deprivation.

Long-Term Effects of Child Poverty

Just one in four pupils from the most disadvantaged families achieve five good GCSEs, compared with almost 75% among wealthier families. This predisposes them for the challenges they face throughout their lives: missed potential, financial struggles and ill health. Children who grew up in poverty are more likely to be unemployed or poor as adults.

Confronting child poverty isn’t just a ethical duty, it is a future-oriented strategy. Poverty costs the economy far, far more than the £3bn cost of removing 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 over a hundred additional children pushed into poverty. The benefits of lifting it won’t happen overnight either, so taking early action in the parliament was vital.

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

Fair Funding for Policies

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

Final Thoughts

Equity and direction – that’s how we will succeed in the contest of ideas. This budget is a clear statement that we gained the election as Labour, and will govern as Labour. As I consistently said during my campaign to become deputy leader, we must reclaim the political platform and define the narrative more strongly about what’s really wrong with the country and how we are repairing 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 address the entrenched inequalities impeding progress.