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Yesterday, the chancellor, Rachel Reeves, presented a Labour economic plan. People have been calling for Labour’s mission and values to be more distinctly expressed. By way of the choices made – a transition to a fairer tax system, targeting wealth to pay for addressing child poverty, quality public services and the cost of living – we have clearly demonstrated what we believe in.

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 cries from the conservative side began right away.

The Central Political Divide in British Government

The primary division in British politics is once again on the economy. On the one side Labour, who want to reform it so it helps everyday working people, and on the other, our opponents, who support the current system and the failed ideology of the past. We must now confront, and win, the debate.

The Tories had 14 years to resolve things and instead, by every standard, they got much worse. Their ideological austerity and trickle-down economics – tax breaks for the wealthy, cutting off investment (leaving us with low productivity and wages), and neglecting to support young people after the pandemic – didn’t work.

Legacy of Decline Under the Former Administration

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

One 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 strategy will yield benefits.

Social Security and Child Poverty

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 deal with the effects instead of the cure.

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, reducing waiting lists down and bringing down the costs of childcare and energy as we pursue clean power.

Ending the Two-Child Limit

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

For eight long years, since it was introduced, 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 impacted 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 unethical.

Tangible Effects in Local Areas

From experience from my own constituency – where over 5,000 children will be raised out of poverty as a result of abolishing the cap – the real impact it’s had. Children wearing £1 wellies as school shoes, children going to bed without food and cold, living in overcrowded, mouldy 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 stretched but have to divert time and resources to supporting children who are living with the consequences of deep poverty.

Long-Term Effects of Youth Hardship

Just one in four pupils from the poorest families achieve five good GCSEs, compared with almost 75% among wealthier families. This sets them up for the disadvantages they face during 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 moral imperative, it is a future-oriented strategy. Poverty costs the economy far, far more than the £3bn cost of lifting 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 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 crucial.

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

Equitable Funding for Policies

We, as Labour, can also be clear that these measures are being funded in a just 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 gained 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 platform and set the agenda more forcefully about what’s really wrong with the country and how we are repairing it. We’ve definitely done that this week.

So let’s maintain it and prevail in this struggle about how we will rebuild Britain and tackle the entrenched inequalities impeding progress.