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Yesterday, the finance minister, Rachel Reeves, presented a Labour Party budget. People have been asking for Labour’s mission and principles to be more distinctly articulated. By way of the choices made – a transition to a more equitable tax system, focusing on wealth to fund addressing child poverty, quality public services and the cost of living – we have clearly set out what we stand for.

That’s why Labour MPs applauded in the Commons, and it’s why we are ready for the fights to come. And it’s why the protests from the right began right away.

The Central Dividing Line in British Politics

The primary division in British politics is once again on the economy. On the one hand Labour, who aim to change it so it benefits ordinary working people, and on the opposite side, our political opponents, who support the status quo and the unsuccessful ideology of the past. We must now confront, and win, the argument.

The Tories were given 14 years to fix things and in reality, by every standard, they got much worse. 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 after the pandemic – proved ineffective.

Record of Failure Under the Former Administration

Living standards dropped by the largest margin since records began, child poverty reached record levels, NHS waiting lists in England were the highest on record, wages remained flat, a housing crisis took hold, young people scarred by Covid were abandoned. The history of failure goes on.

One budget alone can’t fix everything, so Labour has a long-term plan for rebuilding and for rewiring the country. And we have to go out and continue making the argument for why our approach will yield benefits.

Social Security and Child Poverty

Under the Tories, welfare spending rose substantially. As did child poverty, because they failed to tackle the root causes: low pay, high housing costs, deep inequalities in education, health and regions. The state is forced to paying more to manage the effects instead of the solution.

It’s why we are building more affordable homes 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 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 enacted, low-income families with children have endured 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, ultimately, costs us more, as well as being callous and immoral.

Real Impact in Local Areas

From experience from my own district – 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 without food and cold, living in cramped, mouldy 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 redirect time and resources to supporting children who are living with the results of severe deprivation.

Long-Term Effects of Youth Hardship

Just one in four pupils from the most disadvantaged 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 grew up 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 far, far 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 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 crucial.

The cap was a symbol to 14 years of failed conservative ideology. Now it is abolished.

Fair 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, closing tax loopholes and a new “mansion tax”.

Final Thoughts

Equity and direction – that’s how we will succeed in the battle 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 define the narrative more strongly about what’s truly flawed with the country and how we are fixing it. We’ve definitely done that this week.

So let’s keep hold of it and prevail in this struggle about how we will rebuild Britain and tackle the deep inequalities holding us back.