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Yesterday, the finance minister, Rachel Reeves, presented a Labour Party economic plan. People have been calling for Labour’s purpose and principles to be more distinctly expressed. By way of the decisions made – a transition to a fairer tax system, targeting wealth to fund tackling child poverty, quality public services and the living expenses – we have clearly demonstrated what we stand for.

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

The Main Political Divide in UK Politics

The primary dividing line in British politics is yet again on the economy. On the one hand Labour, who want to change it so it benefits everyday working people, and on the other, our political opponents, who favor the current system and the unsuccessful doctrine of the past. We must now confront, and prevail in, the argument.

The Tories were given 14 years to resolve things and instead, by every standard, they got much worse. Their doctrinaire austerity and supply-side economics – tax cuts for the wealthy, cutting off investment (causing us with poor productivity and wages), and failing to support young people after the pandemic – didn’t work.

Record of Failure Under the Former Administration

Living standards dropped by the biggest amount since records began, child poverty reached 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 abandoned. The record of failure goes on.

A single budget alone can’t fix everything, so Labour has a comprehensive plan for rebuilding and for restructuring the country. And we have to go out and continue making the case for why our approach will yield benefits.

Social Security and Child Poverty

During the Tories, welfare spending significantly increased. 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 is forced to paying more to deal with the effects instead of the solution.

It’s why we are building more social housing than for a generation, increasing wages and enhanced protections for workers, greatly increasing investment in infrastructure and new industries, getting waiting lists down and bringing down the costs of childcare and energy as we pursue clean power.

Ending 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 introduced, low-income 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 impacted by it have a parent in work.

It has only served to push 300,000 more children into poverty – which, in the end, costs us more, as well as being callous and immoral.

Tangible Effects in Local Areas

I know from my own district – 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 hungry 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 redirect time and resources to supporting children who are living with the consequences of severe deprivation.

Lasting Effects of Youth Hardship

Just a quarter of pupils from the poorest families achieve five good GCSEs, compared with almost 75% among affluent families. This predisposes them for the challenges they face throughout their lives: missed potential, financial 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 ethical duty, it is a future-oriented strategy. 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 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 will not occur overnight either, so taking early action in the parliament was vital.

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

Fair Financing for Measures

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

Final Thoughts

Fairness 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 lead 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 strongly about what’s really wrong with the country and how we are repairing it. We’ve certainly done that this week.

So let’s keep hold of it and win this struggle about how we will renew Britain and address the entrenched inequalities impeding progress.