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Just recently, the finance minister, Rachel Reeves, delivered a Labour economic plan. The public have been calling for Labour’s purpose and values to be more distinctly expressed. By way of the choices made – a shift to a fairer tax system, focusing on wealth to pay for addressing child poverty, quality public services and the cost of living – we have unequivocally demonstrated what we stand for.

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

The Central Political Divide in British Politics

The primary division 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 other, our political opponents, who favor the status quo and the failed doctrine of the past. We must now confront, and win, the argument.

The Tories were given 14 years to fix things and instead, by any measure, they got much worse. Their ideological austerity and trickle-down economics – tax cuts for the wealthy, reducing investment (leaving us with poor productivity and wages), and neglecting to support young people post-Covid – proved ineffective.

Legacy of Failure Under the Previous Government

Living standards dropped by the biggest amount since records began, child poverty hit record levels, NHS waiting lists in England were the highest on record, wages were stagnant, a housing crisis took hold, young people scarred by Covid were left on the scrapheap. The record of failure goes on.

One budget alone can’t put all this right, so Labour has a comprehensive plan for rebuilding and for restructuring the country. And we have to go out and keep making the case for why our strategy will yield benefits.

Social Security and Child Poverty

During the Tories, welfare spending rose substantially. As did child poverty, because they failed to tackle the underlying issues: low pay, high housing costs, significant inequalities in education, health and regions. The state ends up paying more to deal with the symptoms instead of the solution.

It’s why we are building more social housing than for a generation, increasing wages and new rights for workers, massively boosting 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 completely justified to use this budget to lift 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 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 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 real impact it’s had. Children wearing £1 wellies as school shoes, children going to bed hungry and cold, living in cramped, damp homes, parents this Christmas depending 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 results of severe deprivation.

Long-Term Effects of Youth Hardship

Just a quarter of pupils from the poorest families achieve five good GCSEs, compared with nearly three in four among affluent families. This predisposes them for the challenges they face throughout their lives: unrealized potential, financial struggles and ill 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 three billion pound cost of lifting the two-child cap, or expanding 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 effects of lifting it will not occur 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.

Equitable Financing for Measures

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”.

Conclusion

Fairness and direction – that’s how we will succeed in the contest of ideas. This budget is a definitive statement that we won the election as Labour, and will govern as Labour. As I consistently said during my campaign to become deputy leader, we must seize back the political megaphone and define the narrative 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 maintain it and prevail in this struggle about how we will renew Britain and address the entrenched inequalities impeding progress.