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Just recently, the finance minister, Rachel Reeves, presented a Labour budget. The public have been calling for Labour’s mission and principles to be more distinctly articulated. By way of the choices made – a transition to a more equitable tax system, focusing on wealth to pay for tackling child poverty, good public services and the cost of living – we have clearly set out what we believe in.

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

The Central Political Divide in UK Government

The primary dividing line in British politics is once again on the economy. On the one hand Labour, who want to change it so it benefits ordinary working people, and on the opposite side, our political opponents, who support the current system and the failed ideology of the past. We must now confront, and prevail in, the argument.

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 breaks for the wealthy, cutting off investment (leaving us with poor productivity and wages), and neglecting to support young people after the pandemic – proved ineffective.

Legacy of Decline Under the Former Government

Living standards dropped 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 affected by Covid were left on the scrapheap. The record of failure continues.

A single budget alone can’t fix everything, so Labour has a long-term plan for renewal and for restructuring the country. And we have to go out and continue making the argument for why our approach will reap dividends.

Social Security and Youth Deprivation

During the Tories, welfare spending rose substantially. As did child poverty, because they didn’t address the root causes: low pay, high housing costs, significant inequalities in education, health and regions. The state is forced to paying more to deal with the effects instead of the solution.

That’s why we are building more social housing 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.

Ending the Two-Child Benefit Cap

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

For almost a decade, since it was enacted, poorer families with children have suffered from a cruel social experiment that was branded as fair for working people when it was the opposite. 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 heartless and unethical.

Tangible Effects in Local Areas

I know from my own district – 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 without food and cold, living in overcrowded, mouldy homes, parents during the holidays relying 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 consequences of severe deprivation.

Long-Term Consequences of Child Poverty

Just one in four pupils from the most disadvantaged families achieve five good GCSEs, compared with nearly three in four among affluent families. This predisposes them for the challenges they face throughout their lives: unrealized potential, financial struggles and ill health. Children who were raised in poverty are more likely to be jobless or poor as adults.

Addressing child poverty isn’t just a moral imperative, it is a future-oriented strategy. Poverty costs the economy far, far more than the £3bn cost of removing the two-child cap, or extending 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 extra children pushed into poverty. The benefits of lifting it won’t happen overnight either, so taking early action in the parliament was vital.

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

Equitable Financing for Measures

We, as Labour, can also be clear that these initiatives are being paid for in a just 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 won 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 define the narrative more forcefully about what’s truly flawed with the country and how we are fixing it. We’ve certainly done that this week.

So let’s keep hold of it and win this struggle about how we will renew Britain and tackle the entrenched inequalities holding us back.