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Just recently, the finance minister, Rachel Reeves, presented a Labour economic plan. The public have been asking for Labour’s mission and values to be more clearly expressed. Through the choices made – a transition to a more equitable tax system, focusing on wealth to pay for tackling child poverty, quality public services and the cost of living – we have unequivocally set out what we stand for.

That’s why Labour MPs applauded in the Commons, and it’s why we are up for the fights to come. And it’s why the cries from the right began immediately.

The Main Political Divide in British Politics

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 opposite side, our opponents, who favor the status quo and the unsuccessful ideology of the past. We must now take on, and win, the debate.

The Tories were given 14 years to fix things and in reality, by any measure, they got much worse. Their ideological austerity and supply-side economics – tax breaks for the wealthy, reducing investment (causing us with low productivity and wages), and failing to support young people after the pandemic – proved ineffective.

Legacy of Decline Under the Previous Administration

Quality of life dropped by the biggest amount since records began, child poverty hit record levels, NHS waiting lists in England were the highest on record, wages were stagnant, a housing crisis took hold, young people scarred by Covid were left on the scrapheap. The history of failure goes on.

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 keep making the case for why our strategy will yield benefits.

Welfare Spending and Youth Deprivation

During the Tories, welfare spending rose substantially. As did child poverty, because they failed to tackle the root causes: low pay, high housing costs, deep inequalities in education, health and regions. The state ends up paying more to manage the symptoms instead of the cure.

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 lowering the costs of childcare and energy as we pursue clean power.

Removing 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 eight long years, since it was enacted, low-income families with children have endured from a unjust social experiment that was branded 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, ultimately, costs us more, as well as being callous and immoral.

Tangible Effects in Local Areas

I know from my own constituency – 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 low-cost wellies as school shoes, children going to bed hungry and cold, living in cramped, damp homes, parents this Christmas 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 stretched but have to divert time and resources to supporting children who are living with the results of severe deprivation.

Long-Term Effects of Youth Hardship

Just one in four pupils from the most disadvantaged families achieve five good GCSEs, compared with almost 75% among wealthier families. This predisposes them for the disadvantages they face during their lives: missed potential, financial struggles and poor 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 future-oriented strategy. Poverty costs the economy significantly more than the three billion pound cost of removing 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 over a hundred additional children pushed into poverty. The effects 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 failed conservative ideology. Now it is gone.

Equitable Funding for Policies

We, as Labour, can also be clear that these measures are being funded in a fair way – from a new gambling levy, eliminating tax loopholes and a new “mansion tax”.

Final Thoughts

Fairness 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 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 forcefully about what’s really wrong 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 fight about how we will rebuild Britain and address the deep inequalities holding us back.