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Just recently, the chancellor, Rachel Reeves, delivered a Labour Party economic plan. The public have been calling for Labour’s purpose and principles 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 living expenses – we have unequivocally set out what we believe in.

This is why Labour MPs cheered in the Commons, and it’s why we are up for the battles to come. And it’s why the protests from the right began immediately.

The Central Political Divide in UK Politics

The primary dividing line in British politics is yet again on the economy. On the one hand Labour, who aim to change it so it helps ordinary working people, and on the opposite side, our political opponents, who support the status quo and the failed ideology of the past. We must now take on, and prevail in, the argument.

The Tories had 14 years to resolve things and in reality, by any measure, they got much worse. Their ideological austerity and supply-side economics – tax cuts for the wealthy, cutting off investment (causing us with low productivity and wages), and failing to support young people after the pandemic – didn’t work.

Legacy of Decline Under the Previous Administration

Living standards 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 were stagnant, a housing crisis took hold, young people scarred by Covid were left on the scrapheap. The record of failure goes on.

A single budget alone can’t fix everything, so Labour has a long-term plan for renewal and for restructuring the country. And we have to go out and keep making the argument for why our strategy will reap dividends.

Welfare Spending and Youth Deprivation

During the Tories, welfare spending significantly increased. As did child poverty, because they failed to tackle 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 cure.

It’s why we are building 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 pursue clean power.

Removing the Two-Child Limit

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

For eight long years, since it was introduced, 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 has only served to push 300,000 more children into poverty – which, ultimately, costs us more, as well as being heartless and immoral.

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 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, mouldy 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 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 one in four 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 throughout their lives: missed potential, economic struggles and ill health. Children who were raised in poverty are more likely to be jobless 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 expanding 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 more than 100 additional children pushed into poverty. The effects of lifting it won’t happen overnight either, so acting early in the parliament was vital.

The cap was a symbol to 14 years of failed rightwing ideology. Now it is abolished.

Fair Funding for Policies

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

Conclusion

Fairness and direction – 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 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 certainly done that this week.

So let’s maintain it and win this struggle about how we will rebuild Britain and address the entrenched inequalities holding us back.