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Just recently, the finance minister, Rachel Reeves, delivered a Labour Party economic plan. People have been asking for Labour’s mission and principles to be more distinctly articulated. By way of the decisions made – a transition to a fairer tax system, focusing on wealth to fund addressing child poverty, quality public services and the living expenses – we have unequivocally 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 cries from the right began right away.

The Main Political Divide in UK Politics

The central division in British politics is once again on the economy. On the one hand Labour, who want to change it so it benefits everyday working people, and on the other, our opponents, who favor the status quo and the unsuccessful doctrine of the past. We must now take on, and win, the debate.

The Tories had 14 years to fix things and in reality, by every standard, they got much worse. Their ideological austerity and supply-side economics – tax cuts for the wealthy, reducing investment (leaving us with low productivity and wages), and failing to support young people post-Covid – didn’t work.

Legacy of Failure Under the Previous Administration

Quality of life dropped by the biggest amount 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 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 comprehensive plan for renewal and for restructuring the country. And we have to go out and continue making the argument for why our strategy will reap dividends.

Social Security and Youth Deprivation

During the Tories, welfare spending significantly increased. As did child poverty, because they failed to tackle the root causes: low pay, high housing costs, significant inequalities in education, health and regions. The state ends up paying more to manage the effects instead of the solution.

That’s why we are constructing more social housing than for a generation, increasing wages and new rights for workers, greatly increasing investment in infrastructure and new industries, reducing waiting lists down and lowering 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 remove 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 marketed as fair for working people when it was the opposite. Most of the families impacted by it have a parent in work.

It has only served to push 300,000 more children into poverty – which, in the end, costs us more, as well as being heartless and unethical.

Real Impact in Local Areas

From experience from my own district – where over 5,000 children will be lifted out of poverty as a result of abolishing the cap – the actual impact it’s had. Children wearing £1 wellies as school shoes, children going to bed without food and cold, living in cramped, damp homes, parents this Christmas depending 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 stretched but have to divert time and resources to supporting children who are living with the consequences of severe deprivation.

Long-Term Consequences of Youth Hardship

Just a quarter of pupils from the most disadvantaged 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 ill health. Children who grew up in poverty are more likely to be jobless or poor as adults.

Confronting child poverty isn’t just a ethical duty, 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.

This is the reason we acted promptly in the budget, despite the very difficult economic context. Every day with this cap in place sees more than 100 additional children pushed into poverty. The benefits of lifting it won’t happen overnight either, so acting early in the parliament was crucial.

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

Fair Funding for Measures

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

Conclusion

Fairness and direction – that’s how we will win the contest of ideas. This budget is a clear statement that we gained the election as Labour, and will govern as Labour. As I consistently said during my campaign to become deputy leader, we must seize back 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 prevail in this struggle about how we will rebuild Britain and tackle the deep inequalities holding us back.