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Just recently, the chancellor, Rachel Reeves, delivered a Labour economic plan. The public have been asking for Labour’s mission and values to be more distinctly articulated. By way of the decisions made – a transition to a more equitable tax system, focusing on wealth to fund addressing child poverty, quality public services and the cost of living – 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 fights to come. And it’s why the cries from the right began immediately.

The Central Political Divide in British Politics

The primary division in British politics is once again on the economy. On the one hand Labour, who want to change it so it helps everyday working people, and on the other, our opponents, who favor the current system and the failed ideology of the past. We must now confront, and prevail in, the argument.

The Tories were given 14 years to resolve things and in reality, by every standard, they got far more dire. Their ideological austerity and supply-side economics – tax breaks for the wealthy, reducing investment (causing us with poor productivity and wages), and neglecting to support young people post-Covid – proved ineffective.

Record of Decline Under the Previous Government

Quality of life dropped by the biggest amount since records began, child poverty hit 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 renewal and for restructuring the country. And we have to go out and continue making the case for why our approach will yield benefits.

Social Security and Child Poverty

During 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 ends up paying more to manage the effects instead of the cure.

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, getting waiting lists down and lowering the costs of childcare and energy as we drive for clean power.

Removing the Two-Child Limit

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

For eight long years, since it was enacted, 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 has only served to push 300,000 more children into poverty – which, ultimately, costs us more, as well as being heartless and immoral.

Real Impact in Local Areas

I know from my own constituency – where over 5,000 children will be raised out of poverty as a result of ending 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 cramped, mouldy homes, parents this Christmas 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 overburdened but have to redirect time and resources to supporting children who are living with the results of severe deprivation.

Lasting Effects of Child Poverty

Just one in four pupils from the most disadvantaged 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: missed potential, economic 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 long-term investment. Poverty costs the economy far, far more than the three billion pound cost of removing the two-child cap, or extending 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 more than 100 extra children pushed into poverty. The effects of lifting it will not occur overnight either, so taking early action in the parliament was vital.

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

Equitable Financing for Policies

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

Conclusion

Equity and direction – that’s how we will win the contest of ideas. This budget is a clear 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 reclaim the political platform and set the agenda more forcefully about what’s truly flawed 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 rebuild Britain and tackle the entrenched inequalities impeding progress.