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Just recently, the finance minister, Rachel Reeves, presented a Labour economic plan. The public have been asking for Labour’s mission and principles to be more distinctly articulated. Through the choices made – a transition to a fairer tax system, targeting wealth to pay for tackling child poverty, good public services and the living expenses – we have clearly 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 cries from the right began immediately.

The Main Political Divide in UK Government

The primary 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 other, our political opponents, who favor the status quo and the failed ideology of the past. We must now confront, and win, the argument.

The Tories were given 14 years to resolve things and in reality, by any measure, they got far more dire. Their ideological austerity and trickle-down economics – tax cuts for the wealthy, reducing investment (leaving us with low productivity and wages), and failing to support young people after the pandemic – didn’t work.

Legacy of Failure Under the Previous Administration

Living standards dropped by the biggest amount since records began, child poverty reached 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 long-term plan for renewal and for rewiring the country. And we have to go out and continue making the argument for why our strategy will yield benefits.

Social Security and Youth Deprivation

During the Tories, welfare spending significantly increased. As did child poverty, because they failed to tackle the root causes: low pay, high housing costs, significant inequalities in education, health and regions. The state ends up paying more to deal with the effects instead of the cure.

That’s why we are building more affordable homes than for a generation, increasing wages and enhanced protections for workers, greatly increasing investment in infrastructure and new industries, reducing waiting lists down and lowering 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 remove the two-child benefit cap.

For eight long years, since it was introduced, poorer 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 has only served to push 300,000 more children into poverty – which, ultimately, costs us more, as well as being callous and immoral.

Real Impact in Communities

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 real impact it’s had. Children wearing low-cost wellies as school shoes, children going to bed without food and cold, living in overcrowded, mouldy 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 stretched but have to redirect time and resources to supporting children who are living with the consequences of deep poverty.

Lasting Effects of Youth Hardship

Just a quarter of pupils from the poorest families achieve five good GCSEs, compared with almost 75% among wealthier families. This sets them up for the challenges they face throughout their lives: missed potential, economic struggles and poor health. Children who grew up in poverty are more likely to be unemployed or poor as adults.

Addressing child poverty isn’t just a ethical duty, 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 expanding 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 over a hundred extra children pushed into poverty. The effects of lifting it won’t happen overnight either, so acting early in the parliament was vital.

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

Fair Funding for Measures

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 win 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 reclaim the political megaphone and set the agenda more forcefully about what’s really wrong with the country and how we are fixing it. We’ve definitely 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 holding us back.