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Just recently, the chancellor, Rachel Reeves, delivered a Labour Party budget. The public have been asking for Labour’s purpose and principles to be more distinctly expressed. By way of the choices made – a shift to a more equitable tax system, focusing on wealth to pay for addressing child poverty, quality public services and the cost of living – we have clearly set out what we stand for.

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

The Central Dividing Line in British Politics

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 benefits ordinary working people, and on the opposite side, our political opponents, who favor the status quo and the unsuccessful doctrine of the past. We must now confront, and win, the argument.

The Tories were given 14 years to fix things and instead, by any measure, they got far more dire. Their doctrinaire austerity and supply-side economics – tax breaks for the wealthy, reducing investment (causing us with poor productivity and wages), and neglecting to support young people post-Covid – proved ineffective.

Legacy of Failure Under the Previous Government

Living standards dropped by the largest margin since records began, child poverty hit record levels, NHS waiting lists in England were the highest they’ve ever been, wages remained flat, a housing crisis became entrenched, young people scarred by Covid were left on the scrapheap. The record of failure goes on.

A single budget alone can’t put all this right, so Labour has a long-term plan for renewal and for restructuring the country. And we have to go out and continue making the argument for why our approach 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, deep inequalities in education, health and regions. The state is forced to paying more to deal with 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, greatly increasing investment in infrastructure and new industries, getting waiting lists down and bringing down the costs of childcare and energy as we drive for clean power.

Removing the Two-Child Benefit Cap

It’s also why 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 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’s done nothing but push 300,000 more children into poverty – which, ultimately, costs us more, as well as being heartless 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 ending the cap – the real impact it’s had. Children wearing low-cost wellies as school shoes, children going to bed without food and cold, living in cramped, damp homes, parents this Christmas 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 deep poverty.

Long-Term Consequences of Youth Hardship

Just a quarter of 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, 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.

That’s why 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 benefits of lifting it will not occur overnight either, so taking early action in the parliament was vital.

The cap was a totem to 14 years of failed 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 just way – from a new gaming tax, eliminating tax loopholes and a new “mansion tax”.

Final Thoughts

Equity and purpose – that’s how we will succeed in 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 seize back the political megaphone and define the narrative 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 struggle about how we will renew Britain and tackle the deep inequalities impeding progress.