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Yesterday, the chancellor, Rachel Reeves, presented a Labour Party budget. The public have been asking for Labour’s mission and principles to be more clearly articulated. Through the choices made – a transition to a fairer tax system, focusing on wealth to pay for tackling child poverty, quality public services and the cost of living – we have unequivocally demonstrated what we stand for.

That’s why Labour MPs applauded 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 immediately.

The Main Political Divide in UK Government

The primary dividing line in British politics is yet again on the economy. On the one hand Labour, who want to reform it so it benefits 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 win, the debate.

The Tories were given 14 years to fix things and instead, by any measure, they got much worse. Their ideological austerity and supply-side economics – tax cuts for the wealthy, reducing investment (leaving us with low productivity and wages), and neglecting to support young people after the pandemic – didn’t work.

Legacy of Failure Under the Former Government

Living standards fell by the biggest amount 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 abandoned. The record of failure continues.

A single budget alone can’t fix everything, so Labour has a long-term plan for rebuilding and for rewiring the country. And we have to go out and keep making the case for why our strategy will reap dividends.

Social Security and Child Poverty

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

It’s why we are building more affordable homes than for a generation, increasing wages and new rights 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 pursue clean power.

Ending the Two-Child Benefit Cap

This is also the reason we are completely justified to use this budget to remove the two-child benefit cap.

For eight long years, since it was introduced, poorer families with children have endured from a cruel 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’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 Communities

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, mouldy 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 overburdened but have to redirect time and resources to supporting children who are living with the results of deep poverty.

Lasting Consequences of Child Poverty

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 during their lives: unrealized potential, economic struggles and poor health. Children who were raised in poverty are more likely to be jobless 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 lifting the two-child cap, or extending 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 benefits 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 unsuccessful rightwing ideology. Now it is abolished.

Fair Funding for Measures

We, as Labour, can also be explicit that these initiatives are being funded 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 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 megaphone and set the agenda more forcefully about what’s truly flawed with the country and how we are repairing it. We’ve definitely done that this week.

So let’s keep hold of it and prevail in this fight about how we will rebuild Britain and address the entrenched inequalities impeding progress.