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Just recently, the chancellor, Rachel Reeves, delivered a Labour economic plan. The public have been asking for Labour’s mission and values to be more distinctly 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 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 protests from the conservative side began immediately.

The Central Political Divide in British Politics

The central dividing line in British politics is once again on the economy. On the one side Labour, who want to change it so it helps everyday working people, and on the opposite side, our opponents, who support the current system and the unsuccessful doctrine of the past. We must now confront, and win, the argument.

The Tories were given 14 years to fix things and in reality, by every standard, they got much worse. Their ideological austerity and trickle-down economics – tax breaks for the wealthy, cutting off investment (leaving us with poor productivity and wages), and failing to support young people post-Covid – didn’t work.

Legacy of Failure Under the Former Government

Living standards 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 affected by Covid were abandoned. The record of failure continues.

A single budget alone can’t fix everything, so Labour has a comprehensive plan for rebuilding and for rewiring the country. And we have to go out and keep making the case 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 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 deal with the symptoms instead of the cure.

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

Removing the Two-Child Benefit Cap

This is also the reason we are completely justified 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 suffered from a unjust 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, in the end, costs us more, as well as being callous and immoral.

Tangible Effects in Communities

From experience from my own constituency – where over 5,000 children will be raised 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 without food and cold, living in cramped, 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 Consequences 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, economic 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.

This is the reason we acted urgently 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 will not occur overnight either, so acting early in the parliament was vital.

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

Equitable Financing for Measures

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

Conclusion

Equity 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 repeatedly said during my campaign to become deputy leader, we must seize back the political megaphone and set the agenda more strongly about what’s truly flawed with the country and how we are repairing it. We’ve definitely done that this week.

So let’s maintain it and prevail in this struggle about how we will rebuild Britain and address the deep inequalities impeding progress.