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Just recently, the finance minister, Rachel Reeves, delivered a Labour Party 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 pay for addressing child poverty, quality public services and the living expenses – we have clearly set out what we stand for.

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

The Central Political Divide in British Politics

The primary dividing line in British politics is yet again on the economy. On the one hand Labour, who want to change it so it benefits ordinary working people, and on the opposite side, our political opponents, who support the current system and the unsuccessful ideology of the past. We must now confront, and win, the debate.

The Tories had 14 years to fix things and instead, by every standard, they got far more dire. 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 post-Covid – didn’t work.

Record of Decline Under the Previous Administration

Quality of life fell by the largest margin since records began, child poverty hit record levels, NHS waiting lists in England were the highest they’ve ever been, wages were stagnant, 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 comprehensive plan for rebuilding and for restructuring the country. And we have to go out and continue making the argument for why our approach will yield benefits.

Welfare Spending and Child Poverty

Under the Tories, welfare spending rose substantially. 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 is forced to paying more to manage the effects instead of the solution.

That’s why we are building more affordable homes than for a generation, raising wages and enhanced protections for workers, greatly increasing investment in infrastructure and new industries, reducing waiting lists down and lowering the costs of childcare and energy as we pursue clean power.

Ending the Two-Child Limit

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

For almost a decade, since it was introduced, low-income families with children have suffered from a cruel social experiment that was marketed as fair for working people when it was the opposite. Most of the families affected 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 callous and unethical.

Real Impact in Local Areas

I know from my own district – 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 £1 wellies as school shoes, children going to bed without food and cold, living in cramped, damp 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 consequences of severe deprivation.

Lasting Effects of Youth Hardship

Just a quarter of pupils from the poorest families achieve five good GCSEs, compared with almost 75% among wealthier families. This predisposes them for the challenges they face during their lives: unrealized 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 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.

This is the reason we acted urgently in the budget, despite the challenging economic context. Every day with this cap in place sees over a hundred extra 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 totem to 14 years of unsuccessful conservative ideology. Now it is abolished.

Fair Financing for Measures

We, as Labour, can also be explicit that these measures are being funded in a fair way – from a new gambling levy, closing tax loopholes and a new “mansion tax”.

Conclusion

Fairness and purpose – that’s how we will succeed in the battle of ideas. This budget is a definitive statement that we gained 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 set the agenda 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 prevail in this fight about how we will renew Britain and address the entrenched inequalities holding us back.