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Yesterday, the finance minister, Rachel Reeves, delivered a Labour Party budget. People have been asking for Labour’s mission and principles to be more clearly expressed. Through the decisions made – a transition to a more equitable tax system, targeting wealth to fund addressing child poverty, quality public services and the living expenses – we have unequivocally demonstrated what we stand for.

That’s why Labour MPs applauded 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 immediately.

The Main Dividing Line in UK Government

The primary dividing line in British politics is once again on the economy. On the one hand Labour, who want to reform it so it helps ordinary working people, and on the other, our political opponents, who favor the status quo and the unsuccessful ideology of the past. We must now take on, and win, the debate.

The Tories had 14 years to fix things and in reality, by every standard, they got much worse. Their ideological austerity and trickle-down economics – tax breaks for the wealthy, cutting off investment (causing us with poor productivity and wages), and neglecting to support young people after the pandemic – proved ineffective.

Legacy of Decline Under the Former Government

Living standards dropped by the largest margin 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 affected by Covid were left on the scrapheap. The history of failure goes on.

One budget alone can’t fix everything, so Labour has a comprehensive plan for renewal and for rewiring the country. And we have to go out and keep making the case for why our strategy will reap dividends.

Social Security and Youth Deprivation

Under the Tories, welfare spending significantly increased. As did child poverty, because they didn’t address the underlying issues: low pay, high housing costs, significant inequalities in education, health and regions. The state ends up paying more to manage the symptoms instead of the cure.

That’s why we are constructing more affordable homes than for a generation, increasing wages and new rights 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 drive for clean power.

Removing 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 eight long years, since it was introduced, poorer families with children have endured from a cruel social experiment that was branded as fair for working people when it was anything but. Most of the families impacted 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 immoral.

Tangible Effects in Communities

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 hungry and cold, living in overcrowded, 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 redirect time and resources to supporting children who are living with the consequences of deep poverty.

Long-Term Consequences of Youth Hardship

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

Confronting child poverty isn’t just a moral imperative, it is a long-term investment. Poverty costs the economy significantly 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 extra children pushed into poverty. The benefits of lifting it will not occur overnight either, so acting early in the parliament was vital.

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

Equitable Funding for Policies

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

Conclusion

Equity and direction – that’s how we will succeed in the contest of ideas. This budget is a clear statement that we gained 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 megaphone and set the agenda more strongly about what’s truly flawed with the country and how we are repairing it. We’ve definitely done that this week.

So let’s maintain it and prevail in this struggle about how we will rebuild Britain and tackle the deep inequalities holding us back.