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Yesterday, the chancellor, Rachel Reeves, presented a Labour economic plan. The public have been asking for Labour’s purpose and values to be more clearly articulated. Through the choices made – a shift to a more equitable tax system, targeting wealth to pay for tackling child poverty, good public services and the living expenses – we have clearly set out what we believe in.

That’s 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 right began right away.

The Central Dividing Line in UK Politics

The primary division in British politics is yet again on the economy. On the one side Labour, who aim to change it so it benefits ordinary working people, and on the opposite side, our opponents, who favor the current system and the failed doctrine of the past. We must now confront, and prevail in, the debate.

The Tories were given 14 years to resolve things and instead, by any measure, they got much worse. Their doctrinaire austerity and trickle-down economics – tax breaks for the wealthy, reducing investment (causing us with low productivity and wages), and failing to support young people post-Covid – didn’t work.

Legacy of Decline Under the Former Administration

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 remained flat, a housing crisis became entrenched, young people affected by Covid were abandoned. The record of failure continues.

A single budget alone can’t put all this right, so Labour has a long-term plan for rebuilding and for rewiring the country. And we have to go out and continue making the case for why our approach will yield benefits.

Social Security and Youth Deprivation

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.

It’s why we are building more social housing 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.

Removing 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 almost a decade, 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 affected by it have a parent in work.

It has only served to push 300,000 more children into poverty – which, ultimately, costs us more, as well as being heartless and unethical.

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 actual impact it’s had. Children wearing £1 wellies as school shoes, children going to bed without food and cold, living in cramped, damp homes, parents during the holidays relying 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.

Lasting Consequences of Child Poverty

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 challenges 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 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 effects of lifting it won’t happen overnight either, so acting early in the parliament was vital.

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

Equitable Financing for Measures

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

Conclusion

Fairness and direction – 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 platform and define the narrative more strongly about what’s truly flawed with the country and how we are fixing it. We’ve definitely done that this week.

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