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Just recently, the chancellor, Rachel Reeves, presented a Labour Party economic plan. The public have been calling for Labour’s mission and principles to be more distinctly expressed. Through the decisions made – a transition to a more equitable tax system, focusing on wealth to fund addressing child poverty, quality public services and the cost of living – we have clearly set out what we believe in.

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

The Central Dividing Line in British Government

The primary division in British politics is once again on the economy. On the one hand Labour, who want to change it so it helps ordinary working people, and on the other, our political opponents, who support the current system and the failed ideology of the past. We must now take on, and prevail in, the debate.

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

Record of Decline Under the Previous Government

Quality of life fell by the largest margin since records began, child poverty reached 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 put all this right, so Labour has a comprehensive plan for rebuilding and for rewiring the country. And we have to go out and continue making the argument for why our strategy will yield benefits.

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, significant inequalities in education, health and regions. The state is forced to 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, 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.

Ending the Two-Child Limit

This is also the reason we are completely justified to use this budget to remove 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 marketed as fair for working people when it was the opposite. Most of the families affected by it have a parent in work.

It’s done nothing but push 300,000 more children into poverty – which, in the end, costs us more, as well as being heartless and unethical.

Tangible Effects 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 real impact it’s had. Children wearing £1 wellies as school shoes, children going to bed hungry and cold, living in overcrowded, damp homes, parents during the holidays 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 deep poverty.

Lasting Effects of Youth Hardship

Just one in four pupils from the poorest 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 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 future-oriented strategy. Poverty costs the economy significantly more than the three billion pound cost of lifting 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 additional children pushed into poverty. The effects of lifting it will not occur overnight either, so taking early action 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 clear that these measures are being funded in a just way – from a new gaming tax, closing tax loopholes and a new “mansion tax”.

Final Thoughts

Fairness and purpose – that’s how we will succeed in the battle of ideas. This budget is a clear 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 seize back the political megaphone and set the agenda more strongly about what’s really wrong with the country and how we are fixing it. We’ve definitely done that this week.

So let’s maintain it and win this fight about how we will renew Britain and tackle the deep inequalities impeding progress.