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Just recently, the finance minister, Rachel Reeves, delivered a Labour Party budget. The public have been asking for Labour’s purpose and principles to be more distinctly expressed. By way of the choices made – a transition to a fairer tax system, targeting wealth to fund addressing child poverty, quality public services and the cost of living – we have clearly demonstrated what we stand for.

That’s why Labour MPs applauded in the Commons, and it’s why we are up for the battles to come. And it’s why the protests from the conservative side began immediately.

The Central Dividing Line in UK Politics

The primary dividing line in British politics is yet again on the economy. On the one side Labour, who want to reform it so it benefits ordinary working people, and on the other, our opponents, who favor the status quo and the unsuccessful ideology of the past. We must now confront, and prevail in, the debate.

The Tories were given 14 years to fix things and in reality, by every standard, they got much worse. Their doctrinaire austerity and trickle-down economics – tax breaks for the wealthy, reducing investment (leaving us with poor productivity and wages), and neglecting to support young people post-Covid – proved ineffective.

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 were stagnant, a housing crisis became entrenched, young people affected by Covid were abandoned. The history of failure goes on.

A single budget alone can’t put all this right, so Labour has a comprehensive plan for rebuilding and for restructuring the country. And we have to go out and continue making the argument for why our approach will reap dividends.

Welfare Spending and Youth Deprivation

Under the Tories, welfare spending rose substantially. As did child poverty, because they failed to tackle 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 affordable homes than for a generation, increasing wages and enhanced protections for workers, massively boosting investment in infrastructure and new industries, getting waiting lists down and lowering 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 lift the two-child benefit cap.

For almost a decade, since it was introduced, low-income families with children have endured from a cruel social experiment that was marketed as fair for working people when it was the opposite. 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 immoral.

Tangible Effects in Local Areas

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 overcrowded, mouldy 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 redirect time and resources to supporting children who are living with the results of severe deprivation.

Long-Term Effects of Youth Hardship

Just a quarter of pupils from the poorest families achieve five good GCSEs, compared with nearly three in four among affluent families. This sets them up for the disadvantages they face throughout their lives: missed potential, economic struggles and ill health. Children who were raised in poverty are more likely to be jobless or poor as adults.

Confronting child poverty isn’t just a moral imperative, it is a future-oriented strategy. Poverty costs the economy significantly more than the three billion pound cost of lifting the two-child cap, or expanding free school meals.

That’s why we acted urgently in the budget, despite the challenging economic context. Every day with this cap in place sees more than 100 extra 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 totem to 14 years of failed rightwing ideology. Now it is abolished.

Fair Financing for Policies

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

Final Thoughts

Fairness and purpose – that’s how we will win the battle of ideas. This budget is a clear statement that we won the election as Labour, and will govern as Labour. As I consistently said during my campaign to become deputy leader, we must seize back the political megaphone and define the narrative more strongly about what’s really wrong 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 struggle about how we will renew Britain and tackle the deep inequalities holding us back.