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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 clearly articulated. By way of 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 cost of living – we have unequivocally demonstrated what we stand for.

This is 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 right began right away.

The Central Political Divide in British Politics

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

The Tories had 14 years to resolve things and instead, by any measure, they got far more dire. Their ideological austerity and supply-side economics – tax cuts for the wealthy, reducing investment (leaving us with low productivity and wages), and neglecting to support young people after the pandemic – didn’t work.

Record of Failure Under the Previous Government

Living standards 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 were stagnant, a housing crisis became entrenched, young people affected by Covid were abandoned. The history of failure goes on.

One budget alone can’t put all this right, so Labour has a long-term plan for renewal and for rewiring the country. And we have to go out and keep making the case for why our strategy will yield benefits.

Welfare Spending and Child Poverty

Under the Tories, welfare spending rose substantially. As did child poverty, because they failed to tackle the underlying issues: low pay, high housing costs, significant 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 bringing down the costs of childcare and energy as we drive for clean power.

Removing the Two-Child Benefit Cap

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

For almost a decade, since it was enacted, low-income families with children have endured 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, in the end, costs us more, as well as being heartless and unethical.

Real Impact in Communities

I know from my own district – 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 £1 wellies as school shoes, children going to bed without food and cold, living in overcrowded, damp 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 overburdened but have to redirect time and resources to supporting children who are living with the consequences of deep poverty.

Lasting Consequences of Youth Hardship

Just a quarter of pupils from the poorest families achieve five good GCSEs, compared with nearly three in four among affluent families. This sets them up for the challenges they face during their lives: unrealized potential, financial 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 ethical duty, it is a long-term investment. Poverty costs the economy far, far more than the three billion pound 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 over a hundred extra 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 abolished.

Fair Funding for Policies

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

Final Thoughts

Equity and purpose – that’s how we will succeed in the battle of ideas. This budget is a definitive 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 define the narrative 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 prevail in this fight about how we will renew Britain and address the deep inequalities impeding progress.