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Just recently, the chancellor, Rachel Reeves, delivered a Labour economic plan. People have been asking for Labour’s mission and principles to be more distinctly articulated. Through the decisions made – a shift to a fairer tax system, focusing on wealth to fund addressing child poverty, quality public services and the living expenses – we have clearly demonstrated 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 right away.

The Main Political Divide in UK Politics

The primary dividing line in British politics is once again on the economy. On the one side Labour, who aim to reform it so it benefits everyday working people, and on the opposite side, our political opponents, who support the status quo and the failed ideology of the past. We must now take on, and win, 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 (leaving us with poor productivity and wages), and neglecting to support young people post-Covid – didn’t work.

Record of Failure Under the Former Government

Quality of life dropped by the largest margin since records began, child poverty hit record levels, NHS waiting lists in England were the highest on record, wages were stagnant, a housing crisis became entrenched, young people scarred by Covid were left on the scrapheap. The record of failure goes on.

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

Welfare Spending and Child Poverty

Under the Tories, welfare spending significantly increased. 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 is forced to paying more to manage the symptoms instead of the cure.

It’s why we are constructing more social housing than for a generation, raising wages and new rights for workers, greatly increasing investment in infrastructure and new industries, reducing waiting lists down and lowering the costs of childcare and energy as we drive for clean power.

Ending the Two-Child Benefit Cap

This is also the reason we are completely justified to use this budget to remove the two-child benefit cap.

For almost a decade, since it was introduced, poorer families with children have endured 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, ultimately, costs us more, as well as being heartless and immoral.

Tangible Effects in Local Areas

I know from my own district – 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 without food and cold, living in overcrowded, mouldy homes, parents this Christmas 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 overburdened but have to redirect time and resources to supporting children who are living with the consequences of deep poverty.

Lasting Effects of Child Poverty

Just a quarter of pupils from the most disadvantaged families achieve five good GCSEs, compared with nearly three in four among wealthier families. This sets them up for the disadvantages they face throughout their lives: unrealized potential, financial struggles and poor health. Children who were raised in poverty are more likely to be jobless 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 £3bn 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 over a hundred additional 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 failed conservative ideology. Now it is gone.

Fair Funding for Measures

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

Conclusion

Equity and purpose – that’s how we will win the contest of ideas. This budget is a clear statement that we won 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 megaphone and define the narrative 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 address the entrenched inequalities holding us back.