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Yesterday, the finance minister, Rachel Reeves, delivered a Labour economic plan. People have been asking for Labour’s mission and values to be more clearly expressed. By way of the decisions made – a shift to a more equitable tax system, targeting wealth to fund tackling child poverty, quality public services and the living expenses – we have clearly set out what we believe in.

This is why Labour MPs cheered in the Commons, and it’s why we are ready for the fights to come. And it’s why the cries from the right began right away.

The Main Political Divide in British Politics

The primary division 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 opponents, who support the status quo and the failed ideology of the past. We must now confront, and win, the argument.

The Tories had 14 years to resolve things and in reality, by any measure, they got far more dire. Their doctrinaire austerity and trickle-down economics – tax breaks for the wealthy, cutting off investment (leaving us with poor productivity and wages), and failing to support young people after the pandemic – proved ineffective.

Record of Decline Under the Previous Administration

Quality of life fell by the largest margin since records began, child poverty hit 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 fix everything, so Labour has a long-term plan for renewal and for restructuring the country. And we have to go out and continue making the case for why our strategy will reap dividends.

Social Security and Child Poverty

During the Tories, welfare spending significantly increased. As did child poverty, because they didn’t address the root causes: low pay, high housing costs, significant inequalities in education, health and regions. The state is forced to paying more to manage the effects instead of the cure.

It’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 pursue clean power.

Removing the Two-Child Limit

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

For almost a decade, since it was enacted, low-income families with children have suffered from a unjust social experiment that was marketed as fair for working people when it was anything but. 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, ultimately, costs us more, as well as being heartless and unethical.

Real Impact in Local Areas

From experience from my own constituency – 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 overcrowded, mouldy homes, parents during the holidays 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 overburdened 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 almost 75% among affluent families. This sets them up for the challenges they face throughout their lives: unrealized potential, financial struggles and ill health. Children who grew up in poverty are more likely to be unemployed 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 £3bn cost of removing the two-child cap, or extending free school meals.

That’s why we acted urgently 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 acting early in the parliament was crucial.

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

Fair Funding for Measures

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

Final Thoughts

Equity and purpose – that’s how we will win the battle of ideas. This budget is a definitive 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 reclaim the political megaphone and set the agenda more forcefully about what’s truly flawed with the country and how we are fixing it. We’ve definitely done that this week.

So let’s maintain it and prevail in this fight about how we will renew Britain and address the entrenched inequalities holding us back.