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Yesterday, the chancellor, Rachel Reeves, delivered a Labour Party economic plan. People have been asking for Labour’s mission and values to be more distinctly articulated. Through the choices made – a shift to a fairer tax system, focusing on wealth to pay for addressing child poverty, quality public services and the living expenses – we have unequivocally demonstrated what we believe in.

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

The Central Dividing Line in British Government

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

The Tories were given 14 years to fix things and instead, by every standard, they got much worse. Their ideological austerity and trickle-down economics – tax breaks for the wealthy, reducing investment (leaving us with poor productivity and wages), and failing to support young people after the pandemic – proved ineffective.

Legacy of Failure Under the Former Administration

Quality of life fell by the largest margin 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 became entrenched, young people scarred by Covid were abandoned. The history of failure goes on.

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

Social Security and Child Poverty

During the Tories, welfare spending rose substantially. 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 is forced to paying more to manage the effects instead of the cure.

That’s why we are building more social housing than for a generation, raising wages and enhanced protections for workers, massively boosting investment in infrastructure and new industries, getting waiting lists down and lowering 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 absolutely right 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 the opposite. 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, in the end, costs us more, as well as being heartless and immoral.

Real Impact in Communities

I know 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 £1 wellies as school shoes, children going to bed without food and cold, living in overcrowded, damp 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 overburdened but have to redirect time and resources to supporting children who are living with the results of severe deprivation.

Lasting Consequences of Child Poverty

Just a quarter of pupils from the most disadvantaged families achieve five good GCSEs, compared with almost 75% among wealthier families. This sets them up for the challenges they face throughout their lives: missed potential, economic struggles and poor health. Children who were raised in poverty are more likely to be jobless or poor as adults.

Addressing child poverty isn’t just a moral imperative, it is a long-term investment. Poverty costs the economy significantly more than the £3bn cost of removing 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 effects of lifting it won’t happen overnight either, so taking early action in the parliament was crucial.

The cap was a totem to 14 years of failed rightwing ideology. Now it is gone.

Fair Funding for Policies

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

Conclusion

Equity and purpose – that’s how we will win the contest of ideas. This budget is a definitive statement that we gained the election as Labour, and will lead as Labour. As I repeatedly 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 certainly done that this week.

So let’s maintain it and win this fight about how we will rebuild Britain and address the entrenched inequalities impeding progress.