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Yesterday, the finance minister, Rachel Reeves, delivered a Labour Party budget. The public have been asking for Labour’s purpose and principles to be more distinctly articulated. Through the decisions made – a transition to a more equitable tax system, targeting wealth to fund addressing child poverty, good public services and the cost of living – we have unequivocally demonstrated what we stand for.

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

The Central Political Divide in British Politics

The central dividing line in British politics is yet again on the economy. On the one side Labour, who aim to change it so it benefits everyday working people, and on the other, our political opponents, who support the status quo and the unsuccessful doctrine of the past. We must now confront, and win, the argument.

The Tories had 14 years to resolve things and in reality, by every standard, they got much worse. 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.

Record of Decline Under the Previous 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 they’ve ever been, wages remained flat, a housing crisis took hold, young people scarred by Covid were left on the scrapheap. The history of failure goes on.

A single budget alone can’t put all this right, 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 approach will reap dividends.

Welfare Spending and Child Poverty

Under the Tories, welfare spending significantly increased. 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 solution.

It’s why we are building more affordable homes than for a generation, raising 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.

Removing the Two-Child Benefit Cap

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

For eight long years, since it was enacted, low-income families with children have suffered from a unjust social experiment that was marketed as fair for working people when it was anything but. Most of the families impacted 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 immoral.

Real Impact in Communities

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 real impact it’s had. Children wearing £1 wellies as school shoes, children going to bed hungry and cold, living in cramped, 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 consequences of severe deprivation.

Long-Term Consequences of Youth Hardship

Just one in four pupils from the poorest families achieve five good GCSEs, compared with almost 75% among affluent families. This sets them up for the disadvantages they face during their lives: unrealized potential, financial struggles and poor health. Children who were raised 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 urgently 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 effects of lifting it will not occur overnight either, so taking early action in the parliament was vital.

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

Equitable Financing for Measures

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

Final Thoughts

Equity and direction – that’s how we will succeed in the battle of ideas. This budget is a clear statement that we won 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 define the narrative more strongly about what’s truly flawed with the country and how we are fixing it. We’ve certainly done that this week.

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