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Yesterday, the chancellor, Rachel Reeves, presented a Labour Party budget. People have been calling for Labour’s mission and principles to be more distinctly expressed. By way of the decisions made – a shift to a fairer tax system, focusing on wealth to pay for addressing child poverty, good public services and the cost of living – we have unequivocally set out what we stand for.

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

The Central Political Divide in British Politics

The primary dividing line in British politics is yet again on the economy. On the one hand Labour, who want to reform it so it helps ordinary working people, and on the opposite side, our opponents, who favor the status quo and the unsuccessful doctrine of the past. We must now take on, and win, the debate.

The Tories were given 14 years to fix things and in reality, by every standard, they got much worse. Their doctrinaire austerity and supply-side economics – tax cuts for the wealthy, cutting off investment (leaving us with poor productivity and wages), and failing to support young people post-Covid – didn’t work.

Record of Decline Under the Previous Government

Living standards fell by the largest margin since records began, child poverty hit 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 continues.

A single 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 case for why our strategy will reap dividends.

Social Security and Child Poverty

Under the Tories, welfare spending significantly increased. 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 deal with the effects instead of the cure.

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

Removing the Two-Child Benefit Cap

It’s also why we are absolutely right to use this budget to remove the two-child benefit cap.

For almost a decade, since it was enacted, poorer 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’s done nothing but push 300,000 more children into poverty – which, ultimately, costs us more, as well as being callous and unethical.

Real Impact in Communities

I know 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 £1 wellies as school shoes, children going to bed hungry and cold, living in overcrowded, damp homes, parents during the holidays depending 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 stretched but have to redirect time and resources to supporting children who are living with the results of deep poverty.

Lasting Consequences of Youth Hardship

Just a quarter of 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, economic 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 future-oriented strategy. Poverty costs the economy far, far more than the three billion pound cost of removing the two-child cap, or expanding free school meals.

That’s why 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 benefits of lifting it won’t happen overnight either, so acting early in the parliament was crucial.

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

Fair Funding for Policies

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

Final Thoughts

Fairness and purpose – that’s how we will win the contest 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 seize back the political megaphone and set the agenda more strongly about what’s really wrong with the country and how we are fixing it. We’ve definitely done that this week.

So let’s maintain it and prevail in this struggle about how we will renew Britain and tackle the entrenched inequalities impeding progress.