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Yesterday, the chancellor, Rachel Reeves, presented a Labour Party budget. The public have been asking for Labour’s mission and values to be more clearly articulated. By way of the decisions made – a shift to a more equitable tax system, focusing on wealth to fund addressing child poverty, quality public services and the living expenses – we have unequivocally set out 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 protests from the conservative side began immediately.

The Main Political Divide in British Politics

The primary dividing line in British politics is yet again on the economy. On the one side Labour, who want to change it so it helps everyday working people, and on the other, our political opponents, who favor the status quo and the unsuccessful ideology of the past. We must now confront, and win, the debate.

The Tories were given 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, cutting off investment (leaving us with low productivity and wages), and failing to support young people post-Covid – didn’t work.

Record of Decline Under the Previous Government

Living standards fell by the largest margin since records began, child poverty reached record levels, NHS waiting lists in England were the highest they’ve ever been, wages were stagnant, a housing crisis became entrenched, young people scarred by Covid were abandoned. The record of failure continues.

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 case for why our strategy will reap dividends.

Welfare Spending and Youth Deprivation

Under the Tories, welfare spending significantly increased. As did child poverty, because they didn’t address 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 solution.

That’s why we are building more affordable homes than for a generation, raising wages and new rights 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 Benefit Cap

This is also the reason we are absolutely right to use this budget to remove the two-child benefit cap.

For eight long years, since it was introduced, low-income families with children have endured from a unjust social experiment that was marketed as fair for working people when it was the opposite. 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 unethical.

Real Impact in Communities

I know from my own district – where over 5,000 children will be raised 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 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 overburdened but have to divert time and resources to supporting children who are living with the consequences of severe deprivation.

Lasting Effects of Child Poverty

Just a quarter of pupils from the most disadvantaged families achieve five good GCSEs, compared with nearly three in four among wealthier families. This predisposes them for the disadvantages they face throughout their lives: unrealized potential, financial 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 moral imperative, it is a long-term investment. Poverty costs the economy far, far more than the £3bn cost of lifting 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 more than 100 additional children pushed into poverty. The benefits of lifting it will not occur overnight either, so taking early action in the parliament was crucial.

The cap was a totem to 14 years of unsuccessful conservative ideology. Now it is gone.

Equitable Financing for Measures

We, as Labour, can also be clear that these initiatives are being paid for in a fair way – from a new gaming tax, 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 lead as Labour. As I consistently said during my campaign to become deputy leader, we must seize back the political megaphone and set the agenda more forcefully about what’s truly flawed with the country and how we are repairing it. We’ve certainly done that this week.

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