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

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 cries from the conservative side began right away.

The Central Political Divide in UK Government

The primary division in British politics is yet again on the economy. On the one hand Labour, who aim to change it so it benefits everyday working people, and on the other, our political opponents, who support the current system and the failed ideology of the past. We must now confront, and win, the argument.

The Tories were given 14 years to fix things and in reality, by any measure, they got much worse. Their doctrinaire austerity and trickle-down economics – tax cuts for the wealthy, cutting off investment (causing us with low productivity and wages), and neglecting to support young people after the pandemic – proved ineffective.

Record of Decline Under the Former Government

Living standards dropped by the biggest amount since records began, child poverty reached record levels, NHS waiting lists in England were the highest on record, wages remained flat, a housing crisis became entrenched, 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 renewal and for restructuring the country. And we have to go out and keep making the case for why our approach will yield benefits.

Social Security and Child Poverty

During the Tories, welfare spending rose substantially. As did child poverty, because they didn’t address the underlying issues: low pay, high housing costs, deep inequalities in education, health and regions. The state ends up paying more to manage the effects instead of the solution.

That’s why we are constructing 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 bringing down the costs of childcare and energy as we drive for clean power.

Removing the Two-Child Limit

This is also the reason we are completely justified 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 suffered from a cruel social experiment that was branded as fair for working people when it was the opposite. 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 Communities

From experience from my own constituency – 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 without food and cold, living in cramped, damp homes, parents this Christmas depending 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 deep poverty.

Lasting Effects of Youth Hardship

Just one in four pupils from the most disadvantaged families achieve five good GCSEs, compared with almost 75% among affluent families. This sets them up for the disadvantages they face during their lives: unrealized potential, economic struggles and poor health. Children who were raised in poverty are more likely to be unemployed or poor as adults.

Confronting child poverty isn’t just a ethical duty, it is a future-oriented strategy. Poverty costs the economy far, far more than the three billion pound 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 taking early action in the parliament was vital.

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

Fair Financing for Measures

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

Final Thoughts

Fairness and direction – that’s how we will succeed in the battle of ideas. This budget is a clear 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 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 prevail in this fight about how we will renew Britain and address the deep inequalities impeding progress.