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Yesterday, the chancellor, Rachel Reeves, delivered 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 fairer tax system, focusing on wealth to pay for tackling child poverty, quality 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 fights to come. And it’s why the protests from the conservative side began immediately.

The Central Dividing Line in British Government

The primary dividing line in British politics is yet again on the economy. On the one hand Labour, who aim to reform it so it helps everyday working people, and on the opposite side, our political 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 instead, by any measure, they got much worse. Their doctrinaire austerity and trickle-down economics – tax breaks for the wealthy, reducing investment (leaving us with poor productivity and wages), and failing to support young people after the pandemic – proved ineffective.

Record of Decline Under the Former Administration

Quality of life 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 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 comprehensive plan for rebuilding and for rewiring the country. And we have to go out and continue making the case for why our strategy will yield benefits.

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 is forced to paying more to manage the symptoms instead of the solution.

That’s why we are building more social housing than for a generation, raising 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.

Ending the Two-Child Limit

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

For eight long years, since it was enacted, poorer families with children have suffered from a cruel social experiment that was marketed as fair for working people when it was anything but. Most of the families affected 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 heartless and immoral.

Tangible Effects in Communities

I know from my own district – where over 5,000 children will be raised out of poverty as a result of ending 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, 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.

Lasting Effects of Youth Hardship

Just a quarter of pupils from the most disadvantaged families achieve five good GCSEs, compared with almost 75% among wealthier families. This predisposes them for the challenges they face during their lives: unrealized potential, economic struggles and ill health. Children who grew up in poverty are more likely to be unemployed or poor as adults.

Addressing child poverty isn’t just a moral imperative, it is a long-term investment. Poverty costs the economy significantly more than the £3bn cost of removing the two-child cap, or expanding free school meals.

That’s why we acted urgently in the budget, despite the challenging economic context. Every day with this cap in place sees more than 100 additional children pushed into poverty. The effects of lifting it will not occur overnight either, so acting early in the parliament was crucial.

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

Fair Funding for Measures

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

Conclusion

Fairness and purpose – that’s how we will win the battle of ideas. This budget is a clear statement that we won 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 platform and set the agenda more forcefully about what’s really wrong with the country and how we are repairing it. We’ve definitely done that this week.

So let’s maintain it and win this fight about how we will renew Britain and address the deep inequalities impeding progress.