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Just recently, the chancellor, Rachel Reeves, presented a Labour economic plan. The public have been asking for Labour’s purpose and values to be more distinctly expressed. By way of the decisions made – a transition to a fairer tax system, focusing on wealth to fund addressing child poverty, good public services and the cost of living – we have unequivocally set out what we believe in.

That’s why Labour MPs applauded in the Commons, and it’s why we are ready for the fights to come. And it’s why the cries from the conservative side began right away.

The Main Political Divide in UK Government

The central dividing line in British politics is yet again on the economy. On the one side Labour, who aim to reform it so it benefits ordinary working people, and on the other, our opponents, who support the current system and the failed doctrine of the past. We must now take on, and prevail in, the argument.

The Tories were given 14 years to resolve things and instead, by every standard, they got far more dire. Their doctrinaire austerity and supply-side economics – tax breaks for the wealthy, cutting off investment (causing us with poor productivity and wages), and failing to support young people post-Covid – didn’t work.

Legacy of Failure Under the Former Administration

Quality of life fell by the largest margin 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 left on the scrapheap. The record of failure continues.

One budget alone can’t fix everything, so Labour has a long-term plan for rebuilding and for restructuring the country. And we have to go out and keep making the argument for why our strategy will reap dividends.

Social Security and Child Poverty

During 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 is forced to paying more to manage the effects instead of the cure.

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

Ending the Two-Child Limit

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

For eight long years, since it was enacted, poorer families with children have endured from a unjust social experiment that was branded 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 callous and unethical.

Tangible Effects in Communities

From experience from my own constituency – where over 5,000 children will be raised 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 hungry and cold, living in overcrowded, damp homes, parents during the holidays 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 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 sets them up for the challenges they face throughout their lives: missed potential, financial struggles and ill 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 significantly more than the three billion pound cost of removing the two-child cap, or expanding 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 over a hundred additional 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 unsuccessful rightwing ideology. Now it is gone.

Equitable Financing for Policies

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

Conclusion

Fairness and purpose – that’s how we will succeed in 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 platform 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 maintain it and prevail in this struggle about how we will renew Britain and address the deep inequalities impeding progress.