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Just recently, the finance minister, Rachel Reeves, presented a Labour Party economic plan. People have been asking for Labour’s purpose and values to be more clearly articulated. Through the choices made – a shift to a fairer tax system, focusing on wealth to pay for addressing child poverty, good public services and the cost of living – we have unequivocally demonstrated what we believe in.

That’s why Labour MPs cheered in the Commons, and it’s why we are up for the battles to come. And it’s why the cries from the conservative side began right away.

The Central Dividing Line in UK Government

The central division in British politics is once again on the economy. On the one hand Labour, who aim to reform it so it helps everyday working people, and on the other, our opponents, who support the status quo and the failed doctrine of the past. We must now confront, and prevail in, the debate.

The Tories had 14 years to fix things and instead, by every standard, they got much worse. Their ideological austerity and supply-side economics – tax breaks for the wealthy, cutting off investment (causing us with low productivity and wages), and neglecting to support young people post-Covid – didn’t work.

Record of Failure Under the Former Government

Quality of life fell 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 became entrenched, young people scarred by Covid were left on the scrapheap. 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 restructuring the country. And we have to go out and keep making the case for why our strategy will yield benefits.

Social Security and Child Poverty

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

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 drive for clean power.

Removing the Two-Child Limit

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 unjust social experiment that was marketed as fair for working people when it was the opposite. 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, in the end, costs us more, as well as being callous and unethical.

Real Impact in Local Areas

I know 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 hungry and cold, living in overcrowded, mouldy homes, parents this Christmas 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 divert time and resources to supporting children who are living with the consequences of severe deprivation.

Lasting Effects of Child Poverty

Just one in four 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 during their lives: unrealized 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 ethical duty, it is a future-oriented strategy. 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 promptly 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 crucial.

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

Fair Financing for Policies

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

Final Thoughts

Equity and direction – that’s how we will win the contest of ideas. This budget is a clear statement that we won the election as Labour, and will lead 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 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 renew Britain and address the entrenched inequalities impeding progress.