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Just recently, the finance minister, Rachel Reeves, presented a Labour Party budget. The public have been asking for Labour’s mission and principles to be more distinctly articulated. Through the decisions made – a transition to a more equitable tax system, focusing on wealth to pay for tackling child poverty, quality public services and the living expenses – we have clearly demonstrated what we believe in.

This is why Labour MPs cheered in the Commons, and it’s why we are up for the battles to come. And it’s why the protests from the right began immediately.

The Main Political Divide in UK Government

The central dividing line in British politics is yet again on the economy. On the one side Labour, who want to change it so it benefits everyday working people, and on the opposite side, our political opponents, who support the current system and the failed ideology of the past. We must now take on, and win, 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, cutting off investment (causing us with low productivity and wages), and failing to support young people after the pandemic – didn’t work.

Record of Failure Under the Previous Administration

Living standards fell 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 took hold, young people affected by Covid were abandoned. The record of failure goes on.

One budget alone can’t put all this right, so Labour has a comprehensive plan for rebuilding and for rewiring the country. And we have to go out and keep making the argument for why our strategy will reap dividends.

Welfare Spending and Child Poverty

During the Tories, welfare spending rose substantially. As did child poverty, because they failed to tackle 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 constructing more social housing 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 almost a decade, since it was introduced, 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’s done nothing but push 300,000 more children into poverty – which, ultimately, costs us more, as well as being callous and immoral.

Tangible Effects in Local Areas

From experience from my own constituency – where over 5,000 children will be lifted out of poverty as a result of ending 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 overcrowded, mouldy homes, parents during the holidays 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 redirect time and resources to supporting children who are living with the results of deep poverty.

Long-Term Effects of Child Poverty

Just a quarter of pupils from the poorest families achieve five good GCSEs, compared with nearly three in four among affluent families. This predisposes them for the challenges they face throughout 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.

Addressing 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 vital.

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

Equitable Financing for Measures

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

Final Thoughts

Equity and purpose – that’s how we will win the battle of ideas. This budget is a definitive 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 reclaim the political megaphone and define the narrative more strongly 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 prevail in this struggle about how we will rebuild Britain and address the entrenched inequalities impeding progress.