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Just recently, the chancellor, Rachel Reeves, delivered a Labour economic plan. People have been calling for Labour’s purpose and values to be more distinctly expressed. Through the decisions made – a transition to a more equitable tax system, targeting wealth to fund tackling child poverty, quality public services and the living expenses – we have unequivocally demonstrated what we stand for.

This is why Labour MPs cheered 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 Political Divide in British Politics

The primary division 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 other, our opponents, who support the status quo and the unsuccessful doctrine of the past. We must now confront, and prevail in, the argument.

The Tories were given 14 years to fix things and in reality, by every standard, they got far more dire. Their ideological austerity and trickle-down economics – tax cuts for the wealthy, cutting off investment (leaving us with poor productivity and wages), and failing to support young people post-Covid – proved ineffective.

Record of Failure Under the Former Government

Living standards dropped by the biggest amount since records began, child poverty hit record levels, NHS waiting lists in England were the highest on record, wages remained flat, a housing crisis took hold, young people scarred by Covid were left on the scrapheap. The history of failure goes on.

One 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 continue making the case for why our strategy will reap dividends.

Social Security and Youth Deprivation

During 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 ends up paying more to deal with the symptoms instead of the solution.

That’s why we are building more affordable homes than for a generation, increasing wages and enhanced protections for workers, massively boosting investment in infrastructure and new industries, reducing waiting lists down and lowering the costs of childcare and energy as we drive for clean power.

Ending the Two-Child Benefit Cap

This is also the reason we are absolutely right to use this budget to lift the two-child benefit cap.

For eight long years, since it was introduced, low-income families with children have suffered from a unjust 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.

Tangible Effects in Local Areas

I know from my own district – where over 5,000 children will be raised out of poverty as a result of ending the cap – the actual impact it’s had. Children wearing low-cost 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 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 Youth Hardship

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

Confronting child poverty isn’t just a ethical duty, it is a long-term investment. Poverty costs the economy far, far more than the three billion pound cost of lifting the two-child cap, or expanding free school meals.

This is the reason we acted promptly 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 rightwing ideology. Now it is gone.

Equitable Funding for Policies

We, as Labour, can also be clear that these measures are being paid for in a fair way – from a new gaming tax, eliminating tax loopholes and a new “mansion tax”.

Conclusion

Fairness and purpose – that’s how we will win the battle of ideas. This budget is a clear statement that we won the election as Labour, and will govern as Labour. As I repeatedly 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 certainly done that this week.

So let’s keep hold of it and prevail in this struggle about how we will rebuild Britain and address the deep inequalities holding us back.