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Yesterday, the chancellor, Rachel Reeves, delivered a Labour Party budget. People have been calling for Labour’s mission and values to be more distinctly expressed. By way of the choices made – a shift to a fairer tax system, focusing on wealth to fund addressing child poverty, good public services and the cost of living – we have clearly set out what we stand for.

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

The Central Political Divide in UK Government

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

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

Record of Failure Under the Former Administration

Living standards fell by the biggest amount since records began, child poverty hit record levels, NHS waiting lists in England were the highest on record, wages were stagnant, a housing crisis became entrenched, young people affected by Covid were left on the scrapheap. The history of failure continues.

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 case for why our approach will reap dividends.

Welfare Spending and Child Poverty

Under the Tories, welfare spending rose substantially. As did child poverty, because they failed to tackle the root causes: low pay, high housing costs, deep inequalities in education, health and regions. The state ends up paying more to deal with 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, reducing 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 lift the two-child benefit cap.

For almost a decade, since it was enacted, poorer families with children have endured from a unjust social experiment that was marketed 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, 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 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 cramped, damp homes, parents this Christmas relying 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 overburdened but have to divert time and resources to supporting children who are living with the results of severe deprivation.

Lasting Consequences of Youth Hardship

Just a quarter of pupils from the most disadvantaged families achieve five good GCSEs, compared with almost 75% among wealthier families. This predisposes them for the challenges they face during 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 ethical duty, it is a long-term investment. Poverty costs the economy significantly more than the three billion pound cost of removing the two-child cap, or extending free school meals.

This is the reason we acted urgently in the budget, despite the very difficult economic context. Every day with this cap in place sees more than 100 additional children pushed into poverty. The effects 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 unsuccessful conservative ideology. Now it is gone.

Fair Financing for Policies

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

Final Thoughts

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 govern 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 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 prevail in this fight about how we will renew Britain and tackle the entrenched inequalities impeding progress.