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Yesterday, the chancellor, Rachel Reeves, presented a Labour budget. People have been asking for Labour’s purpose and principles to be more distinctly articulated. By way of the decisions made – a transition to a more equitable tax system, focusing on wealth to fund addressing child poverty, good public services and the cost of living – we have clearly demonstrated what we stand for.

This is 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 conservative side began right away.

The Main Dividing Line in UK Government

The central dividing line in British politics is once again on the economy. On the one side Labour, who aim to reform it so it benefits ordinary working people, and on the opposite side, our opponents, who favor the status quo and the unsuccessful doctrine of the past. We must now confront, and prevail in, the debate.

The Tories had 14 years to fix things and instead, by any measure, they got far more dire. Their doctrinaire austerity and supply-side economics – tax cuts for the wealthy, cutting off investment (causing us with low productivity and wages), and neglecting to support young people post-Covid – didn’t work.

Record of Failure Under the Former Administration

Living standards fell 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 scarred by Covid were abandoned. The record of failure goes on.

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

Welfare Spending and Youth Deprivation

Under the Tories, welfare spending rose substantially. 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 deal with the effects instead of the cure.

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

Removing the Two-Child Limit

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

For eight long years, since it was enacted, poorer families with children have suffered from a unjust social experiment that was branded as fair for working people when it was anything but. 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 heartless and immoral.

Tangible Effects in Local Areas

From experience from my own constituency – 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 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 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 results of deep poverty.

Lasting Consequences of Youth Hardship

Just a quarter of pupils from the most disadvantaged families achieve five good GCSEs, compared with nearly three in four among affluent families. This predisposes them for the disadvantages they face throughout their lives: missed potential, economic 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 far, far more than the £3bn cost of lifting the two-child cap, or extending free school meals.

This is the reason we acted promptly 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 effects of lifting it won’t happen overnight either, so acting early in the parliament was crucial.

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 funded in a just way – from a new gambling levy, closing 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 clear statement that we gained the election as Labour, and will govern as Labour. As I repeatedly said during my campaign to become deputy leader, we must reclaim the political platform and set the agenda more forcefully about what’s truly flawed with the country and how we are repairing it. We’ve definitely done that this week.

So let’s maintain it and win this struggle about how we will rebuild Britain and tackle the deep inequalities impeding progress.