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Just recently, the finance minister, Rachel Reeves, delivered a Labour economic plan. The public have been asking for Labour’s mission and values to be more distinctly expressed. By way of the decisions made – a shift to a fairer tax system, focusing on wealth to pay for addressing child poverty, good public services and the cost of living – we have clearly demonstrated what we stand for.

That’s why Labour MPs applauded in the Commons, and it’s why we are up for the battles to come. And it’s why the protests from the conservative side began right away.

The Main Dividing Line in UK Government

The central division in British politics is yet again on the economy. On the one side Labour, who want to reform it so it helps everyday working people, and on the other, our political opponents, who favor the current system and the failed doctrine of the past. We must now confront, and win, the debate.

The Tories were given 14 years to fix things and instead, by any measure, they got far more dire. Their doctrinaire austerity and supply-side economics – tax cuts for the wealthy, cutting off investment (leaving us with low productivity and wages), and neglecting to support young people post-Covid – didn’t work.

Record of Failure Under the Previous Government

Living standards dropped by the biggest amount since records began, child poverty reached record levels, NHS waiting lists in England were the highest they’ve ever been, wages remained flat, a housing crisis took hold, young people affected by Covid were abandoned. The record 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 reap dividends.

Social Security and Child Poverty

Under the Tories, welfare spending significantly increased. As did child poverty, because they failed to tackle the underlying issues: low pay, high housing costs, significant inequalities in education, health and regions. The state ends up paying more to manage the symptoms instead of the cure.

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

Removing the Two-Child Benefit Cap

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

For almost a decade, since it was introduced, poorer families with children have suffered from a unjust social experiment that was branded 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, ultimately, costs us more, as well as being heartless and unethical.

Tangible Effects in Local Areas

From experience from my own constituency – where over 5,000 children will be lifted out of poverty as a result of abolishing the cap – the actual impact it’s had. Children wearing low-cost wellies as school shoes, children going to bed hungry and cold, living in overcrowded, mouldy homes, parents during the holidays depending 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 overburdened but have to redirect time and resources to supporting children who are living with the results of deep poverty.

Long-Term Effects of Youth Hardship

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 during their lives: missed potential, economic struggles and ill health. Children who were raised in poverty are more likely to be unemployed or poor as adults.

Addressing child poverty isn’t just a ethical duty, it is a long-term investment. Poverty costs the economy significantly more than the £3bn cost of removing the two-child cap, or extending free school meals.

That’s why we acted promptly 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 won’t happen overnight either, so taking early action in the parliament was crucial.

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

Equitable Funding for Policies

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

Final Thoughts

Equity and purpose – that’s how we will succeed in the contest of ideas. This budget is a definitive 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 seize back the political platform and define the narrative more forcefully about what’s really wrong with the country and how we are repairing it. We’ve certainly done that this week.

So let’s keep hold of it and win this fight about how we will renew Britain and tackle the entrenched inequalities impeding progress.