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Just recently, the finance minister, Rachel Reeves, presented a Labour Party economic plan. People have been calling for Labour’s purpose and values to be more distinctly expressed. Through the choices made – a shift to a fairer tax system, targeting wealth to pay for addressing child poverty, good public services and the living expenses – we have clearly demonstrated what we stand for.

That’s why Labour MPs applauded in the Commons, and it’s why we are up for the fights to come. And it’s why the protests from the conservative side began immediately.

The Main Political Divide in British Government

The central dividing line in British politics is once again on the economy. On the one hand Labour, who want to change it so it helps ordinary working people, and on the other, our opponents, who favor the status quo and the unsuccessful 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 much worse. Their ideological austerity and trickle-down 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 dropped 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 record of failure continues.

One budget alone can’t fix everything, so Labour has a long-term plan for renewal and for rewiring 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

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 ends up paying more to manage the symptoms instead of the cure.

It’s why we are building more social housing 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 drive for clean power.

Ending the Two-Child Benefit Cap

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

For eight long years, since it was introduced, poorer families with children have endured 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 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

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 low-cost wellies as school shoes, children going to bed hungry and cold, living in cramped, damp homes, parents this Christmas 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 overburdened but have to divert time and resources to supporting children who are living with the consequences of deep poverty.

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 wealthier families. This sets them up for the challenges they face during their lives: missed potential, financial struggles and ill health. Children who grew up in poverty are more likely to be jobless or poor as adults.

Confronting child poverty isn’t just a ethical duty, 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 expanding 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 over a hundred 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 symbol to 14 years of unsuccessful conservative ideology. Now it is abolished.

Equitable Funding for Measures

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

Final Thoughts

Fairness and purpose – 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 govern as Labour. As I consistently said during my campaign to become deputy leader, we must seize back the political megaphone 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 maintain it and prevail in this struggle about how we will renew Britain and tackle the entrenched inequalities impeding progress.