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Just recently, the finance minister, Rachel Reeves, delivered a Labour Party budget. People have been calling for Labour’s mission and values to be more clearly expressed. Through the choices made – a shift to a more equitable tax system, focusing on wealth to pay for tackling child poverty, quality public services and the living expenses – we have unequivocally set out what we believe in.

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 cries from the conservative side began right away.

The Main Dividing Line in British Government

The primary division in British politics is once again on the economy. On the one hand Labour, who want to reform it so it helps everyday working people, and on the opposite side, our opponents, who favor the status quo and the failed ideology of the past. We must now confront, and prevail in, the argument.

The Tories had 14 years to resolve things and instead, by any measure, they got much worse. Their doctrinaire austerity and trickle-down economics – tax cuts 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 biggest amount 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 record of failure continues.

A single budget alone can’t put all this right, so Labour has a comprehensive plan for rebuilding and for rewiring the country. And we have to go out and continue making the case for why our approach will yield benefits.

Welfare Spending and Youth Deprivation

During the Tories, welfare spending significantly increased. As did child poverty, because they didn’t address the root causes: low pay, high housing costs, significant inequalities in education, health and regions. The state is forced to paying more to deal with the symptoms instead of the solution.

That’s why we are building 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.

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 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 has only served to push 300,000 more children into poverty – which, in the end, costs us more, as well as being callous and unethical.

Real Impact in Communities

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 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 this Christmas 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 divert time and resources to supporting children who are living with the results of deep poverty.

Lasting Effects of Youth Hardship

Just one in four pupils from the poorest families achieve five good GCSEs, compared with nearly three in four among wealthier families. This predisposes them for the challenges they face throughout their lives: unrealized potential, financial struggles and poor 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 long-term investment. Poverty costs the economy far, far more than the three billion pound 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 more than 100 extra children pushed into poverty. The benefits of lifting it will not occur 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 gone.

Equitable Financing for Measures

We, as Labour, can also be clear that these measures are being funded in a fair way – from a new gaming tax, eliminating tax loopholes and a new “mansion tax”.

Conclusion

Equity and direction – that’s how we will win the battle of ideas. This budget is a definitive 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 megaphone and set the agenda more strongly about what’s really wrong with the country and how we are repairing it. We’ve definitely done that this week.

So let’s keep hold of it and win this fight about how we will renew Britain and address the entrenched inequalities holding us back.