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Just recently, the finance minister, Rachel Reeves, presented a Labour budget. People have been asking for Labour’s mission and values to be more clearly expressed. By way of the decisions made – a shift to a more equitable tax system, targeting wealth to pay for tackling child poverty, quality public services and the living expenses – we have clearly set out what we believe in.

That’s why Labour MPs applauded 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 Central Political Divide in UK Politics

The primary dividing line in British politics is yet again on the economy. On the one hand Labour, who aim to reform it so it benefits everyday working people, and on the opposite side, our opponents, who favor the current system and the failed doctrine of the past. We must now confront, and prevail in, the debate.

The Tories were given 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 (causing us with low productivity and wages), and neglecting to support young people after the pandemic – proved ineffective.

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 history of failure continues.

A single budget alone can’t put all this right, so Labour has a comprehensive plan for rebuilding and for restructuring the country. And we have to go out and keep making the argument for why our approach will reap dividends.

Social Security and Youth Deprivation

During 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 effects instead of the solution.

That’s why we are constructing more social housing than for a generation, increasing wages and enhanced protections 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 Benefit Cap

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, poorer families with children have endured 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 heartless and unethical.

Real Impact in Communities

From experience from my own district – where over 5,000 children will be raised out of poverty as a result of abolishing the cap – the actual impact it’s had. Children wearing £1 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 stretched but have to divert time and resources to supporting children who are living with the consequences of severe deprivation.

Lasting Consequences of Child Poverty

Just a quarter of 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, financial struggles and poor health. Children who grew up in poverty are more likely to be jobless or poor as adults.

Addressing child poverty isn’t just a ethical duty, it is a future-oriented strategy. Poverty costs the economy far, far more than the three billion pound cost of lifting the two-child cap, or extending free school meals.

That’s why we acted urgently in the budget, despite the challenging economic context. Every day with this cap in place sees more than 100 additional children pushed into poverty. The benefits of lifting it won’t happen overnight either, so acting early in the parliament was vital.

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

Equitable Financing for Policies

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

Conclusion

Fairness and direction – that’s how we will succeed in the battle of ideas. This budget is a clear statement that we won the election as Labour, and will govern as Labour. As I repeatedly said during my campaign to become deputy leader, we must reclaim the political megaphone 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 maintain it and prevail in this struggle about how we will renew Britain and tackle the deep inequalities impeding progress.