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Just recently, the finance minister, Rachel Reeves, delivered a Labour Party economic plan. The public have been asking for Labour’s mission and principles to be more distinctly expressed. Through the decisions made – a shift to a fairer tax system, focusing on wealth to fund tackling child poverty, quality public services and the cost of living – we have unequivocally set out what we believe in.

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

The Central Dividing Line in UK Politics

The central division in British politics is once again on the economy. On the one side Labour, who want to change it so it benefits everyday working people, and on the opposite side, our political opponents, who favor the current system and the unsuccessful doctrine of the past. We must now take on, and win, the debate.

The Tories had 14 years to resolve things and in reality, by every standard, they got much worse. Their ideological austerity and trickle-down economics – tax cuts for the wealthy, cutting off investment (leaving us with low productivity and wages), and failing to support young people after the pandemic – didn’t work.

Legacy of Decline Under the Previous Government

Quality of life fell by the largest margin since records began, child poverty reached record levels, NHS waiting lists in England were the highest on record, wages remained flat, a housing crisis took hold, young people scarred by Covid were left on the scrapheap. The record of failure goes on.

A single budget alone can’t fix everything, so Labour has a long-term plan for rebuilding and for rewiring the country. And we have to go out and continue making the case for why our strategy will reap dividends.

Welfare Spending and Child Poverty

During the Tories, welfare spending significantly increased. As did child poverty, because they failed to tackle the root causes: low pay, high housing costs, significant inequalities in education, health and regions. The state is forced to paying more to deal with the symptoms instead of the cure.

That’s why we are constructing more affordable homes than for a generation, raising 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 drive for clean power.

Removing 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 introduced, poorer families with children have suffered from a cruel 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’s done nothing but push 300,000 more children into poverty – which, in the end, costs us more, as well as being heartless and unethical.

Tangible Effects in Local Areas

I know from my own constituency – 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, mouldy homes, parents during the holidays relying 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 stretched but have to divert time and resources to supporting children who are living with the results of severe deprivation.

Lasting Effects 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: unrealized potential, economic 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 long-term investment. Poverty costs the economy far, far more than the £3bn cost of lifting the two-child cap, or expanding 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 benefits of lifting it will not occur overnight either, so acting early in the parliament was vital.

The cap was a symbol to 14 years of failed conservative ideology. Now it is gone.

Fair Financing for Policies

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

Final Thoughts

Equity and direction – that’s how we will succeed in the battle of ideas. This budget is a definitive statement that we won the election as Labour, and will lead as Labour. As I repeatedly 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 definitely done that this week.

So let’s keep hold of it and win this struggle about how we will renew Britain and address the deep inequalities holding us back.