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Just recently, the chancellor, Rachel Reeves, delivered a Labour Party budget. The public have been asking for Labour’s mission and values to be more distinctly articulated. By way of the decisions made – a transition to a more equitable tax system, focusing on wealth to fund addressing child poverty, good public services and the cost of living – we have clearly set out what we believe in.

This is why Labour MPs cheered 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 Dividing Line in British Politics

The central division in British politics is yet again on the economy. On the one side Labour, who want to reform it so it helps everyday working people, and on the opposite side, our opponents, who support the current system and the failed doctrine of the past. We must now confront, and prevail in, the debate.

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

Record of Decline Under the Former Administration

Living standards dropped by the biggest amount since records began, child poverty hit record levels, NHS waiting lists in England were the highest on record, wages were stagnant, a housing crisis took hold, young people scarred by Covid were abandoned. The history of failure continues.

A single 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 case for why our strategy 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 solution.

It’s why we are building more social housing than for a generation, increasing wages and enhanced protections for workers, massively boosting investment in infrastructure and new industries, getting waiting lists down and lowering the costs of childcare and energy as we drive for 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 almost a decade, since it was enacted, poorer 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’s done nothing but push 300,000 more children into poverty – which, ultimately, costs us more, as well as being callous and unethical.

Tangible Effects in Local Areas

I know from my own district – 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 low-cost wellies as school shoes, children going to bed without food and cold, living in overcrowded, damp homes, parents during the holidays 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 results of deep poverty.

Lasting Consequences of Child Poverty

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

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

This is the reason we acted promptly in the budget, despite the challenging 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 acting early in the parliament was crucial.

The cap was a symbol to 14 years of unsuccessful rightwing ideology. Now it is gone.

Equitable Funding for Policies

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 purpose – that’s how we will succeed in the contest of ideas. This budget is a definitive statement that we gained 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 platform and define the narrative 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 keep hold of it and win this struggle about how we will renew Britain and tackle the deep inequalities impeding progress.