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Yesterday, the finance minister, Rachel Reeves, presented a Labour Party economic plan. The public have been calling for Labour’s mission and principles to be more clearly expressed. Through the decisions made – a shift to a more equitable tax system, focusing on wealth to pay for tackling child poverty, good public services and the cost of living – we have unequivocally demonstrated 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 Political Divide in UK Politics

The primary dividing line in British politics is once again on the economy. On the one hand Labour, who want to reform it so it benefits everyday working people, and on the opposite side, our political opponents, who support the status quo and the failed ideology of the past. We must now confront, and win, the argument.

The Tories were given 14 years to fix things and in reality, by any measure, they got much worse. Their doctrinaire austerity and supply-side economics – tax breaks for the wealthy, cutting off investment (causing us with low productivity and wages), and failing to support young people after the pandemic – didn’t work.

Legacy of Decline Under the Former Government

Quality of life 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 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 rebuilding and for rewiring the country. And we have to go out and continue making the case for why our approach 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, deep inequalities in education, health and regions. The state is forced to paying more to deal with the effects instead of the solution.

That’s why we are building more affordable homes than for a generation, raising 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 drive for clean power.

Ending the Two-Child Benefit Cap

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

For almost a decade, since it was enacted, low-income families with children have suffered from a cruel 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, ultimately, costs us more, as well as being heartless and immoral.

Real Impact in Communities

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 low-cost wellies as school shoes, children going to bed without food and cold, living in cramped, mouldy homes, parents this Christmas 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 overburdened but have to divert time and resources to supporting children who are living with the results of severe deprivation.

Long-Term 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 disadvantages they face during their lives: missed potential, financial struggles and ill health. Children who grew up 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 removing the two-child cap, or extending free school meals.

This is the reason we acted promptly in the budget, despite the challenging 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 symbol to 14 years of failed rightwing ideology. Now it is gone.

Equitable Financing for Measures

We, as Labour, can also be clear that these initiatives are being funded in a fair way – from a new gaming tax, closing 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 gained 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 megaphone 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 maintain it and win this struggle about how we will rebuild Britain and address the deep inequalities holding us back.