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Just recently, the chancellor, Rachel Reeves, presented a Labour Party budget. The public have been asking for Labour’s mission and principles to be more distinctly expressed. By way of the choices made – a transition to a fairer tax system, focusing on wealth to pay for tackling child poverty, quality public services and the cost of living – we have clearly demonstrated what we believe in.

That’s why Labour MPs applauded in the Commons, and it’s why we are ready for the battles to come. And it’s why the protests from the right began right away.

The Main Political Divide in UK Government

The primary division in British politics is once again on the economy. On the one hand Labour, who aim to change it so it benefits everyday working people, and on the opposite side, our political opponents, who favor the status quo and the unsuccessful doctrine of the past. We must now confront, and win, the debate.

The Tories had 14 years to fix things and in reality, by every standard, they got far more dire. Their ideological austerity and supply-side economics – tax cuts for the wealthy, reducing investment (leaving us with poor productivity and wages), and failing to support young people post-Covid – didn’t work.

Legacy of Failure Under the Previous Government

Living standards fell 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 took hold, young people affected by Covid were abandoned. The history of failure continues.

One budget alone can’t put all this right, so Labour has a long-term plan for renewal and for rewiring the country. And we have to go out and continue making the argument for why our approach will reap dividends.

Welfare Spending and Child Poverty

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 solution.

That’s why we are constructing more affordable homes than for a generation, raising wages and enhanced protections for workers, greatly increasing 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 Benefit Cap

This is also the reason we are absolutely right to use this budget to lift the two-child benefit cap.

For eight long years, since it was enacted, poorer families with children have suffered from a unjust social experiment that was branded as fair for working people when it was anything but. 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, in the end, costs us more, as well as being callous 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 ending the cap – the actual impact it’s had. Children wearing low-cost wellies as school shoes, children going to bed without food and cold, living in cramped, mouldy homes, parents during the holidays 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 results of severe deprivation.

Long-Term Consequences of Child Poverty

Just one in four pupils from the most disadvantaged families achieve five good GCSEs, compared with nearly three in four among wealthier families. This predisposes them for the challenges they face throughout their lives: missed potential, financial struggles and ill health. Children who grew up in poverty are more likely to be jobless or poor as adults.

Confronting child poverty isn’t just a moral imperative, 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 very difficult economic context. Every day with this cap in place sees over a hundred extra children pushed into poverty. The effects of lifting it won’t happen overnight either, so acting early in the parliament was crucial.

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

Fair Financing for Policies

We, as Labour, can also be explicit that these measures are being paid for in a fair way – from a new gaming tax, 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 clear statement that we won the election as Labour, and will govern as Labour. As I repeatedly said during my campaign to become deputy leader, we must reclaim the political platform and define the narrative 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 keep hold of it and win this struggle about how we will renew Britain and tackle the deep inequalities impeding progress.