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Just recently, the finance minister, Rachel Reeves, delivered a Labour Party budget. The public have been calling for Labour’s purpose and values to be more distinctly articulated. Through the choices made – a shift to a fairer tax system, focusing on wealth to fund 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 fights to come. And it’s why the protests from the right began right away.

The Central Political Divide in UK Government

The primary dividing line 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 opposite side, our opponents, who favor the current system and the unsuccessful ideology of the past. We must now confront, and win, the debate.

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

Record 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 were stagnant, a housing crisis took hold, young people affected by Covid were left on the scrapheap. The history of failure continues.

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

Social Security and Youth Deprivation

Under the Tories, welfare spending significantly increased. As did child poverty, because they failed to tackle the underlying issues: low pay, high housing costs, deep 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 constructing more social housing than for a generation, increasing wages and enhanced protections for workers, greatly increasing investment in infrastructure and new industries, getting 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 completely justified to use this budget to remove the two-child benefit cap.

For almost a decade, since it was enacted, poorer families with children have endured from a cruel social experiment that was marketed as fair for working people when it was the opposite. 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 unethical.

Real Impact in Local Areas

From experience from my own constituency – where over 5,000 children will be raised 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 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 Child Poverty

Just a quarter of pupils from the poorest families achieve five good GCSEs, compared with almost 75% among wealthier 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 long-term investment. Poverty costs the economy significantly more than the £3bn cost of removing the two-child cap, or extending free school meals.

This is the reason 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 will not occur overnight either, so taking early action in the parliament was crucial.

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

Fair Financing for Policies

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

Conclusion

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 repeatedly 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 definitely done that this week.

So let’s keep hold of it and prevail in this fight about how we will renew Britain and tackle the entrenched inequalities impeding progress.