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Just recently, the chancellor, Rachel Reeves, delivered a Labour Party economic plan. The public have been calling for Labour’s mission and values to be more clearly expressed. Through the choices made – a shift to a fairer tax system, targeting wealth to fund tackling child poverty, quality public services and the living expenses – we have unequivocally set out what we believe in.

That’s why Labour MPs applauded 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 immediately.

The Central Dividing Line in UK Government

The primary division in British politics is once again on the economy. On the one side Labour, who aim to change it so it benefits ordinary working people, and on the opposite side, our opponents, who favor the status quo and the unsuccessful doctrine of the past. We must now take on, and win, the argument.

The Tories were given 14 years to fix things and in reality, by any measure, they got much worse. Their ideological austerity and trickle-down economics – tax breaks for the wealthy, cutting off investment (leaving us with low productivity and wages), and neglecting to support young people after the pandemic – proved ineffective.

Legacy of Failure Under the Previous Administration

Quality of life dropped by the biggest amount since records began, child poverty reached record levels, NHS waiting lists in England were the highest they’ve ever been, wages were stagnant, a housing crisis became entrenched, young people scarred by Covid were abandoned. The record of failure continues.

One budget alone can’t put all this right, 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.

Welfare Spending and Child Poverty

Under the Tories, welfare spending significantly increased. As did child poverty, because they didn’t address the root causes: low pay, high housing costs, deep inequalities in education, health and regions. The state ends up paying more to manage the symptoms instead of the solution.

It’s why we are constructing 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 bringing down the costs of childcare and energy as we pursue clean power.

Ending the Two-Child Limit

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

For eight long years, since it was introduced, low-income families with children have suffered from a cruel social experiment that was branded 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, in the end, costs us more, as well as being callous and unethical.

Tangible Effects in Communities

From experience from my own district – 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 without food 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 results of severe deprivation.

Lasting Consequences of Youth Hardship

Just one in four pupils from the most disadvantaged families achieve five good GCSEs, compared with almost 75% among wealthier families. This sets them up for the disadvantages they face throughout their lives: unrealized potential, economic struggles and poor 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 future-oriented strategy. Poverty costs the economy significantly more than the three billion pound cost of removing the two-child cap, or extending 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 extra children pushed into poverty. The effects 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 gone.

Fair Funding for Policies

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

Final Thoughts

Equity and direction – that’s how we will win the battle of ideas. This budget is a definitive statement that we won the election as Labour, and will lead as Labour. As I consistently said during my campaign to become deputy leader, we must reclaim the political platform and set the agenda more strongly about what’s truly flawed 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 fight about how we will renew Britain and tackle the deep inequalities holding us back.