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Yesterday, the chancellor, Rachel Reeves, presented a Labour Party economic plan. The public have been calling for Labour’s purpose and values to be more clearly articulated. By way of the choices made – a shift to a fairer tax system, targeting wealth to pay for addressing child poverty, good public services and the living expenses – we have unequivocally set out what we believe in.

That’s why Labour MPs cheered 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 immediately.

The Central Political Divide in British Politics

The primary division in British politics is once 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 political opponents, who favor the status quo and the unsuccessful doctrine of the past. We must now take on, and win, the debate.

The Tories had 14 years to fix things and in reality, by any measure, they got much worse. Their ideological austerity and supply-side economics – tax breaks for the wealthy, reducing investment (causing us with poor productivity and wages), and neglecting to support young people after the pandemic – proved ineffective.

Record of Decline Under the Previous Administration

Living standards dropped by the biggest amount since records began, child poverty reached 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 abandoned. The record of failure continues.

A single budget alone can’t put all this right, so Labour has a long-term plan for renewal and for rewiring the country. And we have to go out and continue making the argument for why our strategy will reap dividends.

Social Security 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, deep inequalities in education, health and regions. The state is forced to paying more to manage 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, massively boosting investment in infrastructure and new industries, reducing waiting lists down and bringing down the costs of childcare and energy as we pursue clean power.

Removing the Two-Child Limit

This is also the reason 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 cruel social experiment that was branded as fair for working people when it was anything but. 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 heartless and unethical.

Real Impact in Local Areas

From experience 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 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 overburdened but have to divert 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 poorest families achieve five good GCSEs, compared with nearly three in four among affluent families. This predisposes them for the disadvantages they face during their lives: missed potential, financial struggles and poor health. Children who grew up in poverty are more likely to be unemployed or poor as adults.

Addressing child poverty isn’t just a moral imperative, it is a long-term investment. Poverty costs the economy far, far more than the £3bn cost of removing the two-child cap, or expanding 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 over a hundred additional children pushed into poverty. The benefits of lifting it won’t happen overnight either, so acting early in the parliament was vital.

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

Equitable Financing for Policies

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

Final Thoughts

Equity and purpose – that’s how we will succeed in the contest of ideas. This budget is a clear 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 reclaim the political platform and define the narrative more forcefully about what’s really wrong with the country and how we are repairing it. We’ve certainly done that this week.

So let’s maintain it and win this fight about how we will rebuild Britain and tackle the deep inequalities impeding progress.