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Yesterday, the chancellor, Rachel Reeves, delivered a Labour Party economic plan. People have been asking for Labour’s purpose and values to be more distinctly expressed. By way of the decisions made – a transition to a more equitable tax system, targeting wealth to pay for tackling child poverty, quality public services and the living expenses – we have unequivocally demonstrated what we stand for.

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

The Central Political Divide in UK Politics

The primary dividing line in British politics is once again on the economy. On the one hand Labour, who aim to change it so it helps ordinary working people, and on the other, our opponents, who favor the status quo and the unsuccessful doctrine of the past. We must now take on, and prevail in, the argument.

The Tories were given 14 years to fix things and in reality, by any measure, they got much worse. Their ideological austerity and trickle-down economics – tax cuts for the wealthy, cutting off investment (leaving us with poor productivity and wages), and failing to support young people post-Covid – proved ineffective.

Record of Decline Under the Previous 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 were stagnant, a housing crisis became entrenched, young people affected by Covid were abandoned. The record of failure goes on.

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

Social Security 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, deep 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 building more social housing than for a generation, increasing wages and enhanced protections for workers, greatly increasing 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

This is also the reason we are completely justified 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 endured from a unjust 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, ultimately, costs us more, as well as being callous and unethical.

Tangible Effects in Communities

From experience from my own district – 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 low-cost wellies as school shoes, children going to bed without food and cold, living in overcrowded, damp homes, parents this Christmas 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 overburdened but have to redirect time and resources to supporting children who are living with the results of severe deprivation.

Long-Term Effects of Child Poverty

Just one in four pupils from the most disadvantaged families achieve five good GCSEs, compared with nearly three in four among affluent families. This sets them up for the disadvantages they face throughout their lives: missed potential, economic struggles and ill health. Children who were raised in poverty are more likely to be unemployed or poor as adults.

Confronting child poverty isn’t just a ethical duty, it is a long-term investment. Poverty costs the economy far, far more than the £3bn cost of lifting the two-child cap, or extending 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 more than 100 extra children pushed into poverty. The effects 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 failed rightwing ideology. Now it is gone.

Fair Financing for Measures

We, as Labour, can also be clear that these measures are being funded 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 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 platform and set the agenda more strongly about what’s truly flawed with the country and how we are fixing it. We’ve definitely done that this week.

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