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Just recently, the chancellor, Rachel Reeves, presented a Labour budget. The public have been calling for Labour’s purpose and values to be more distinctly expressed. Through the choices made – a transition to a more equitable tax system, focusing on wealth to fund addressing child poverty, quality public services and the living expenses – we have unequivocally demonstrated what we stand for.

This is why Labour MPs applauded in the Commons, and it’s why we are ready for the battles to come. And it’s why the protests from the conservative side began right away.

The Central Dividing Line in UK Politics

The central dividing line in British politics is once again on the economy. On the one side Labour, who aim to reform it so it helps everyday working people, and on the opposite side, our political opponents, who favor the status quo and the failed doctrine of the past. We must now confront, and prevail in, the debate.

The Tories were given 14 years to fix things and in reality, by every standard, they got far more dire. Their ideological austerity and supply-side economics – tax breaks for the wealthy, cutting off investment (leaving us with low productivity and wages), and failing to support young people after the pandemic – didn’t work.

Record of Decline Under the Former Administration

Quality of life dropped by the largest margin 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 became entrenched, young people scarred by Covid were abandoned. The record of failure goes on.

One budget alone can’t fix everything, so Labour has a comprehensive plan for renewal and for restructuring the country. And we have to go out and continue making the case for why our strategy will reap dividends.

Welfare Spending and Child Poverty

Under the Tories, welfare spending rose substantially. As did child poverty, because they failed to tackle the underlying issues: low pay, high housing costs, significant 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 constructing more social housing than for a generation, raising wages and enhanced protections for workers, massively boosting investment in infrastructure and new industries, getting waiting lists down and bringing down the costs of childcare and energy as we pursue clean power.

Ending the Two-Child Benefit Cap

This is also the reason we are absolutely right 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 marketed 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, in the end, 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 ending the cap – the real impact it’s had. Children wearing low-cost wellies as school shoes, children going to bed hungry and cold, living in cramped, mouldy homes, parents during the holidays relying 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 consequences of severe deprivation.

Lasting Effects of Child Poverty

Just one in four pupils from the most disadvantaged families achieve five good GCSEs, compared with almost 75% among affluent families. This sets them up for the disadvantages they face during their lives: unrealized 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 ethical duty, 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.

That’s why we acted urgently in the budget, despite the very difficult 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 taking early action in the parliament was vital.

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

Equitable Funding for Policies

We, as Labour, can also be explicit 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 direction – that’s how we will succeed in the battle of ideas. This budget is a clear statement that we gained the election as Labour, and will lead as Labour. As I repeatedly said during my campaign to become deputy leader, we must seize back the political platform and set the agenda more strongly about what’s truly flawed with the country and how we are repairing it. We’ve definitely done that this week.

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