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Yesterday, the chancellor, Rachel Reeves, delivered a Labour budget. People have been asking for Labour’s mission and principles to be more clearly articulated. Through the decisions made – a transition to a more equitable tax system, focusing on wealth to pay for addressing child poverty, good public services and the living expenses – we have unequivocally set out what we stand for.

That’s why Labour MPs applauded 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 Main Dividing Line in British Government

The primary division in British politics is once again on the economy. On the one side Labour, who want to change it so it helps ordinary working people, and on the other, our opponents, who support the current system and the failed ideology of the past. We must now confront, and win, the argument.

The Tories were given 14 years to resolve things and instead, by any measure, they got much worse. Their ideological austerity and supply-side economics – tax breaks for the wealthy, cutting off investment (causing us with poor productivity and wages), and neglecting to support young people after the pandemic – proved ineffective.

Legacy of Failure Under the Previous Administration

Living standards 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 became entrenched, young people affected by Covid were abandoned. The record of failure continues.

One budget alone can’t fix everything, 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 approach will yield benefits.

Social Security and Youth Deprivation

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

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

Removing the Two-Child Limit

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

For almost a decade, since it was enacted, low-income families with children have endured from a cruel 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’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.

Real Impact in Communities

I know from my own district – where over 5,000 children will be lifted out of poverty as a result of abolishing the cap – the real impact it’s had. Children wearing £1 wellies as school shoes, children going to bed hungry 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 stretched but have to divert 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 most disadvantaged families achieve five good GCSEs, compared with nearly three in four among affluent families. This predisposes them for the disadvantages they face during their lives: unrealized potential, financial struggles and ill 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 removing the two-child cap, or expanding free school meals.

That’s why we acted urgently in the budget, despite the very difficult economic context. Every day with this cap in place sees over a hundred additional children pushed into poverty. The effects of lifting it will not occur overnight either, so taking early action in the parliament was crucial.

The cap was a symbol to 14 years of failed conservative ideology. Now it is gone.

Fair Funding 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”.

Conclusion

Equity and purpose – 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 repeatedly said during my campaign to become deputy leader, we must seize back the political platform and set the agenda 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 maintain it and prevail in this fight about how we will rebuild Britain and tackle the entrenched inequalities holding us back.