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Yesterday, the finance minister, Rachel Reeves, delivered a Labour Party budget. People have been asking for Labour’s mission and values to be more clearly expressed. By way of the choices made – a shift to a fairer tax system, focusing on wealth to fund tackling child poverty, good public services and the cost of living – we have clearly set out what we stand for.

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

The Central Dividing Line in UK 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 helps ordinary working people, and on the opposite side, our political opponents, who favor the current system and the unsuccessful ideology of the past. We must now confront, and prevail in, the argument.

The Tories had 14 years to resolve things and instead, by every standard, they got far more dire. Their doctrinaire austerity and supply-side economics – tax cuts for the wealthy, reducing investment (causing us with low productivity and wages), and neglecting to support young people after the pandemic – proved ineffective.

Record 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 on record, wages were stagnant, a housing crisis became entrenched, young people affected by Covid were left on the scrapheap. The record of failure continues.

A single budget alone can’t fix everything, so Labour has a comprehensive plan for renewal and for rewiring the country. And we have to go out and keep making the case for why our approach will yield benefits.

Social Security and Youth Deprivation

During the Tories, welfare spending rose substantially. As did child poverty, because they didn’t address the root causes: low pay, high housing costs, significant inequalities in education, health and regions. The state is forced to paying more to manage the effects instead of the solution.

That’s why we are constructing more social housing than for a generation, raising wages and new rights for workers, greatly increasing investment in infrastructure and new industries, reducing waiting lists down and bringing down 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 remove 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 marketed as fair for working people when it was anything but. Most of the families affected 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 unethical.

Real Impact in Communities

From experience from my own district – where over 5,000 children will be lifted 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 hungry and cold, living in cramped, damp homes, parents this Christmas 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 overburdened but have to divert time and resources to supporting children who are living with the consequences of severe deprivation.

Lasting Consequences of Youth Hardship

Just one in four pupils from the poorest families achieve five good GCSEs, compared with almost 75% among affluent families. This predisposes them for the challenges they face during their lives: missed potential, financial struggles and poor health. Children who were raised in poverty are more likely to be unemployed or poor as adults.

Addressing child poverty isn’t just a ethical duty, it is a future-oriented strategy. Poverty costs the economy far, far more than the £3bn cost of removing the two-child cap, or expanding free school meals.

That’s why we acted urgently 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 won’t happen overnight either, so acting early in the parliament was crucial.

The cap was a symbol to 14 years of unsuccessful conservative ideology. Now it is abolished.

Equitable Funding for Measures

We, as Labour, can also be clear that these initiatives are being paid for in a fair way – from a new gaming tax, closing 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 govern as Labour. As I repeatedly said during my campaign to become deputy leader, we must reclaim the political platform and define the narrative 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 prevail in this fight about how we will renew Britain and tackle the entrenched inequalities holding us back.