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Yesterday, the chancellor, Rachel Reeves, delivered a Labour Party budget. The public have been calling for Labour’s purpose and values to be more clearly articulated. By way of the decisions made – a shift to a fairer tax system, targeting wealth to fund tackling child poverty, quality public services and the living expenses – we have unequivocally set out what we believe in.

That’s why Labour MPs cheered 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 Politics

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

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

Record of Failure Under the Former Administration

Living standards dropped 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 became entrenched, young people scarred by Covid were left on the scrapheap. The record of failure continues.

A single 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 keep making the argument for why our strategy will reap dividends.

Social Security and Youth Deprivation

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

That’s why we are constructing more social housing than for a generation, increasing 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 pursue clean power.

Ending the Two-Child Benefit Cap

It’s also why we are completely justified to use this budget to lift the two-child benefit cap.

For eight long years, since it was enacted, poorer families with children have endured from a unjust social experiment that was branded 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 callous and immoral.

Real Impact in Local Areas

From experience from my own district – where over 5,000 children will be raised out of poverty as a result of abolishing the cap – the actual 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 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 redirect time and resources to supporting children who are living with the results of deep poverty.

Long-Term Effects of Child Poverty

Just a quarter of 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 during their lives: missed potential, economic struggles and ill health. Children who were raised in poverty are more likely to be unemployed or poor as adults.

Addressing child poverty isn’t just a moral imperative, it is a long-term investment. Poverty costs the economy far, far more than the three billion pound 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 more than 100 extra children pushed into poverty. The effects of lifting it won’t happen overnight either, so taking early action in the parliament was vital.

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

Fair Funding for Policies

We, as Labour, can also be explicit that these initiatives are being funded in a fair way – from a new gambling levy, 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 won 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 platform and set the agenda more strongly 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 struggle about how we will renew Britain and tackle the deep inequalities holding us back.