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Just recently, the chancellor, Rachel Reeves, delivered a Labour economic plan. The public have been calling for Labour’s mission and principles to be more clearly expressed. Through the choices made – a transition to a more equitable tax system, focusing on wealth to pay for addressing child poverty, good public services and the living expenses – we have clearly set out what we believe in.

This is why Labour MPs applauded 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 Political Divide in British Politics

The central dividing line in British politics is yet 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 political opponents, who support the status quo and the unsuccessful doctrine of the past. We must now take on, and prevail in, the debate.

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

Record of Failure Under the Former Government

Quality of life dropped by the biggest amount since records began, child poverty hit record levels, NHS waiting lists in England were the highest they’ve ever been, wages were stagnant, 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 restructuring the country. And we have to go out and continue making the case for why our approach will yield benefits.

Social Security and Youth Deprivation

During 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 ends up paying more to manage the effects instead of the solution.

That’s why we are constructing more social housing than for a generation, raising wages and enhanced protections for workers, greatly increasing investment in infrastructure and new industries, reducing waiting lists down and lowering the costs of childcare and energy as we drive for clean power.

Ending 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 introduced, low-income families with children have suffered from a cruel social experiment that was branded as fair for working people when it was the opposite. Most of the families impacted by it have a parent in work.

It’s done nothing but push 300,000 more children into poverty – which, in the end, costs us more, as well as being heartless and unethical.

Tangible Effects in Local Areas

I know from my own district – 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 cramped, mouldy 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 stretched but have to redirect time and resources to supporting children who are living with the results of deep poverty.

Lasting Effects of Child Poverty

Just a quarter of pupils from the most disadvantaged families achieve five good GCSEs, compared with almost 75% among wealthier families. This predisposes them for the challenges they face throughout their lives: missed potential, economic struggles and ill health. Children who were raised in poverty are more likely to be jobless or poor as adults.

Confronting 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 urgently in the budget, despite the challenging economic context. Every day with this cap in place sees more than 100 additional children pushed into poverty. The benefits of lifting it will not occur overnight either, so acting early in the parliament was vital.

The cap was a totem 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 paid for in a fair way – from a new gaming tax, closing tax loopholes and a new “mansion tax”.

Conclusion

Fairness and direction – that’s how we will win the battle of ideas. This budget is a clear statement that we won the election as Labour, and will lead 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 really wrong 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 fight about how we will renew Britain and tackle the entrenched inequalities impeding progress.