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Yesterday, the chancellor, Rachel Reeves, presented a Labour Party budget. The public have been calling for Labour’s mission and principles to be more clearly expressed. By way of the decisions made – a shift to a more equitable tax system, targeting wealth to fund addressing child poverty, quality public services and the living expenses – we have unequivocally demonstrated what we stand for.

This is 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 immediately.

The Main Political Divide in British Government

The central 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 opposite side, our opponents, who support the current system and the unsuccessful ideology of the past. We must now confront, and prevail in, the debate.

The Tories had 14 years to resolve things and instead, by every standard, they got far more dire. Their ideological austerity and trickle-down economics – tax cuts for the wealthy, reducing investment (causing us with poor productivity and wages), and neglecting to support young people after the pandemic – didn’t work.

Record of Decline Under the Former Administration

Quality of life 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 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 strategy will reap dividends.

Social Security and Youth Deprivation

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

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

Ending the Two-Child Limit

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

For almost a decade, since it was introduced, 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 affected by it have a parent in work.

It’s done nothing but push 300,000 more children into poverty – which, ultimately, costs us more, as well as being heartless and unethical.

Tangible Effects in Communities

From experience from my own constituency – 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 low-cost wellies as school shoes, children going to bed without food and cold, living in cramped, mouldy 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 divert time and resources to supporting children who are living with the consequences of deep poverty.

Long-Term Consequences of Youth Hardship

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 challenges they face throughout their lives: missed potential, economic struggles and poor health. Children who were raised in poverty are more likely to be unemployed or poor as adults.

Addressing child poverty isn’t just a ethical duty, it is a long-term investment. Poverty costs the economy far, far more than the three billion pound cost of lifting the two-child cap, or expanding free school meals.

That’s why we acted promptly in the budget, despite the very difficult economic context. Every day with this cap in place sees more than 100 extra 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 failed conservative ideology. Now it is abolished.

Fair Funding 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, closing tax loopholes and a new “mansion tax”.

Final Thoughts

Equity and purpose – that’s how we will succeed in the battle 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 set the agenda more forcefully about what’s truly flawed with the country and how we are repairing it. We’ve definitely done that this week.

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