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Just recently, the finance minister, Rachel Reeves, presented 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 more equitable tax system, targeting wealth to fund tackling child poverty, quality public services and the living expenses – we have unequivocally demonstrated what we believe in.

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 cries from the right began immediately.

The Central Dividing Line in UK Politics

The central division in British politics is once again on the economy. On the one hand Labour, who aim to reform it so it helps ordinary working people, and on the other, our political opponents, who favor the current system and the failed ideology of the past. We must now take on, and prevail in, the argument.

The Tories were given 14 years to fix things and instead, by any measure, they got far more dire. Their ideological austerity and supply-side economics – tax cuts for the wealthy, reducing investment (causing us with poor productivity and wages), and failing to support young people after the pandemic – proved ineffective.

Record of Failure Under the Former Administration

Quality of life fell 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 became entrenched, young people affected by Covid were abandoned. The history of failure continues.

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 continue making the case for why our strategy will reap dividends.

Social Security and Youth Deprivation

Under 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 ends up paying more to manage the symptoms instead of the solution.

It’s why we are building more affordable homes than for a generation, increasing 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 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 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, ultimately, costs us more, as well as being callous and immoral.

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 real 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 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 overburdened but have to redirect time and resources to supporting children who are living with the results of severe deprivation.

Long-Term Consequences 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 disadvantages they face during 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.

Addressing child poverty isn’t just a moral imperative, it is a future-oriented strategy. Poverty costs the economy far, far more than the £3bn cost of removing the two-child cap, or expanding free school meals.

This is the reason 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 taking early action in the parliament was crucial.

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

Equitable Funding for Measures

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

Final Thoughts

Fairness and purpose – that’s how we will succeed in the contest 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 platform and define the narrative more forcefully about what’s truly flawed with the country and how we are repairing it. We’ve certainly done that this week.

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