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Just recently, the finance minister, Rachel Reeves, delivered a Labour economic plan. The public have been asking for Labour’s purpose and principles to be more distinctly expressed. By way of the decisions made – a shift to a more equitable tax system, focusing on wealth to fund tackling child poverty, quality public services and the living expenses – we have clearly demonstrated what we believe in.

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

The Central Political Divide in British Politics

The central dividing line in British politics is yet again on the economy. On the one hand Labour, who want to change it so it helps everyday working people, and on the opposite side, our political opponents, who favor the status quo and the unsuccessful ideology of the past. We must now confront, and win, the argument.

The Tories were given 14 years to resolve things and instead, by any measure, they got much worse. Their doctrinaire austerity and trickle-down economics – tax breaks for the wealthy, cutting off investment (causing us with poor productivity and wages), and failing to support young people after the pandemic – proved ineffective.

Record of Decline Under the Former Administration

Living standards dropped by the largest margin 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 became entrenched, young people scarred by Covid were abandoned. The record of failure goes on.

A single budget alone can’t fix everything, so Labour has a comprehensive plan for renewal 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

Under the Tories, welfare spending rose substantially. 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 ends up paying more to manage the symptoms instead of the cure.

It’s why we are constructing more affordable homes than for a generation, raising wages and new rights for workers, massively boosting investment in infrastructure and new industries, getting 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 lift the two-child benefit cap.

For almost a decade, since it was enacted, poorer families with children have suffered from a unjust social experiment that was marketed as fair for working people when it was anything but. 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, in the end, costs us more, as well as being heartless and immoral.

Real Impact in Communities

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

Long-Term Consequences of Child Poverty

Just a quarter of pupils from the poorest families achieve five good GCSEs, compared with almost 75% among affluent families. This sets them up 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 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 lifting the two-child cap, or extending free school meals.

This is the reason we acted promptly in the budget, despite the very difficult economic context. Every day with this cap in place sees more than 100 extra children pushed into poverty. The benefits of lifting it won’t happen overnight either, so taking early action in the parliament was vital.

The cap was a totem to 14 years of unsuccessful conservative ideology. Now it is abolished.

Fair Financing for Policies

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

Final Thoughts

Fairness and direction – that’s how we will succeed in the contest 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 platform and define the narrative more strongly about what’s really wrong with the country and how we are fixing it. We’ve certainly done that this week.

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