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Just recently, the finance minister, Rachel Reeves, presented a Labour Party budget. The public have been asking for Labour’s mission and principles to be more clearly articulated. By way of the choices made – a transition to a fairer tax system, focusing on wealth to fund tackling child poverty, good public services and the cost of living – we have unequivocally set out what we stand for.

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 cries from the conservative side began right away.

The Main Dividing Line in UK Politics

The central dividing line in British politics is yet again on the economy. On the one hand Labour, who aim to reform it so it helps ordinary 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 take on, and win, the argument.

The Tories had 14 years to resolve things and instead, by every standard, they got far more dire. Their doctrinaire austerity and supply-side economics – tax cuts for the wealthy, reducing investment (leaving us with poor productivity and wages), and neglecting to support young people post-Covid – didn’t work.

Legacy of Failure Under the Former Administration

Living standards fell 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 became entrenched, young people scarred by Covid were left on the scrapheap. The record of failure continues.

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

Welfare Spending and Youth Deprivation

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

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

Ending the Two-Child Limit

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

For eight long years, 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 impacted 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 callous and unethical.

Tangible Effects in Local Areas

I know from my own constituency – where over 5,000 children will be lifted 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 without food and cold, living in overcrowded, mouldy homes, parents during the holidays 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 stretched but have to divert time and resources to supporting children who are living with the results of severe deprivation.

Long-Term Consequences of Youth Hardship

Just a quarter of pupils from the most disadvantaged families achieve five good GCSEs, compared with almost 75% among affluent families. This predisposes them for the challenges they face during their lives: missed potential, financial 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 moral imperative, 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 extending free school meals.

This is the reason we acted promptly in the budget, despite the challenging economic context. Every day with this cap in place sees over a hundred extra children pushed into poverty. The benefits of lifting it will not occur overnight either, so acting early in the parliament was crucial.

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

Fair Financing for Measures

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

Final Thoughts

Equity and purpose – that’s how we will succeed in the battle of ideas. This budget is a clear statement that we gained the election as Labour, and will govern as Labour. As I consistently said during my campaign to become deputy leader, we must reclaim the political megaphone 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 maintain it and prevail in this struggle about how we will rebuild Britain and tackle the deep inequalities holding us back.