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Just recently, the finance minister, Rachel Reeves, delivered a Labour budget. People have been asking for Labour’s purpose and principles to be more distinctly expressed. Through the decisions made – a transition to a more equitable tax system, targeting wealth to pay for addressing child poverty, good public services and the cost of living – 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 right began right away.

The Central Dividing Line in British Government

The central dividing line in British politics is once again on the economy. On the one side Labour, who aim to change it so it benefits ordinary working people, and on the other, our political 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 had 14 years to fix things and instead, by every standard, they got much worse. Their ideological austerity and trickle-down economics – tax breaks for the wealthy, cutting off investment (leaving us with poor productivity and wages), and failing to support young people after the pandemic – proved ineffective.

Legacy of Failure Under the Previous Government

Quality of life fell 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 remained flat, a housing crisis took hold, young people affected by Covid were abandoned. The record of failure goes on.

A single budget alone can’t fix everything, so Labour has a comprehensive plan for rebuilding and for rewiring the country. And we have to go out and keep making the case for why our approach will reap dividends.

Welfare Spending and Child Poverty

During the Tories, welfare spending significantly increased. 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 deal with the symptoms instead of the solution.

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

Ending 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 introduced, low-income families with children have endured from a unjust 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 heartless and immoral.

Real Impact in Local Areas

From experience 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 without food and cold, living in overcrowded, mouldy homes, parents during the holidays 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.

Long-Term 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 disadvantages they face during their lives: unrealized potential, economic struggles and ill health. Children who grew up in poverty are more likely to be unemployed or poor as adults.

Confronting 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 lifting the two-child cap, or extending free school meals.

That’s why we acted promptly in the budget, despite the challenging economic context. Every day with this cap in place sees more than 100 extra children pushed into poverty. The benefits of lifting it won’t happen overnight either, so taking early action in the parliament was crucial.

The cap was a totem to 14 years of unsuccessful rightwing ideology. Now it is gone.

Fair Funding for Measures

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

Conclusion

Equity and purpose – that’s how we will succeed in the contest of ideas. This budget is a clear statement that we gained the election as Labour, and will govern as Labour. As I consistently said during my campaign to become deputy leader, we must reclaim the political megaphone and set the agenda more forcefully 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 rebuild Britain and tackle the deep inequalities holding us back.