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Just recently, the chancellor, Rachel Reeves, presented a Labour Party economic plan. The public have been calling for Labour’s mission and principles to be more distinctly expressed. By way of the choices made – a transition to a more equitable tax system, focusing on wealth to fund tackling child poverty, good public services and the cost of living – we have unequivocally demonstrated what we believe in.

This is 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 conservative side began right away.

The Central Dividing Line in British Politics

The primary division in British politics is yet again on the economy. On the one side Labour, who want to change it so it benefits everyday working people, and on the other, our opponents, who support the status quo and the failed ideology of the past. We must now take on, and prevail in, the argument.

The Tories were given 14 years to resolve things and in reality, by any measure, they got much worse. Their doctrinaire austerity and trickle-down economics – tax cuts for the wealthy, cutting off investment (leaving us with low productivity and wages), and failing to support young people post-Covid – didn’t work.

Record of Decline Under the Former 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 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 comprehensive plan for renewal and for rewiring the country. And we have to go out and keep making the argument for why our approach will reap dividends.

Social Security and Child Poverty

During the Tories, welfare spending significantly increased. As did child poverty, because they didn’t address the underlying issues: low pay, high housing costs, deep inequalities in education, health and regions. The state is forced to paying more to deal with the symptoms instead of the solution.

It’s why we are building more social housing 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 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 introduced, low-income families with children have suffered from a unjust social experiment that was branded as fair for working people when it was the opposite. Most of the families impacted by it have a parent in work.

It’s done nothing but push 300,000 more children into poverty – which, in the end, costs us more, as well as being callous 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 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, 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 stretched but have to redirect time and resources to supporting children who are living with the consequences of severe deprivation.

Long-Term Effects of Youth Hardship

Just one in four pupils from the poorest families achieve five good GCSEs, compared with almost 75% among wealthier families. This predisposes them for the challenges they face during their lives: unrealized potential, economic struggles and ill health. Children who grew up in poverty are more likely to be unemployed or poor as adults.

Confronting child poverty isn’t just a moral imperative, it is a long-term investment. 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 urgently 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 crucial.

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

Fair Funding for Policies

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

Final Thoughts

Fairness and direction – that’s how we will win the contest of ideas. This budget is a definitive 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 set the agenda more forcefully about what’s really wrong with the country and how we are repairing it. We’ve definitely done that this week.

So let’s keep hold of it and win this fight about how we will rebuild Britain and address the deep inequalities holding us back.