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Just recently, the finance minister, Rachel Reeves, presented a Labour Party economic plan. People have been calling for Labour’s purpose and principles to be more distinctly articulated. Through the choices made – a transition to a more equitable tax system, focusing on wealth to pay for tackling child poverty, good public services and the living expenses – we have unequivocally demonstrated what we stand for.

This is why Labour MPs cheered 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 right away.

The Central Dividing Line in UK Government

The central division in British politics is once again on the economy. On the one hand Labour, who aim to reform it so it benefits ordinary working people, and on the other, our opponents, who support the current system and the failed ideology of the past. We must now take on, and prevail in, the argument.

The Tories had 14 years to resolve things and instead, by every standard, they got far more dire. Their ideological austerity and trickle-down 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 Previous Government

Quality of life fell by the largest margin since records began, child poverty reached record levels, NHS waiting lists in England were the highest on record, wages were stagnant, a housing crisis became entrenched, young people scarred by Covid were left on the scrapheap. 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 rewiring the country. And we have to go out and continue making the argument for why our approach will yield benefits.

Social Security and Youth Deprivation

During the Tories, welfare spending rose substantially. As did child poverty, because they didn’t address the underlying issues: low pay, high housing costs, significant inequalities in education, health and regions. The state is forced to paying more to deal with the symptoms instead of the solution.

That’s why we are constructing more social housing than for a generation, raising wages and enhanced protections for workers, massively boosting 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 Limit

This is also the reason 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 affected by it have a parent in work.

It has only served to push 300,000 more children into poverty – which, in the end, costs us more, as well as being callous 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 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 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 divert time and resources to supporting children who are living with the results of severe deprivation.

Long-Term Consequences of Child Poverty

Just a quarter of pupils from the poorest families achieve five good GCSEs, compared with almost 75% among wealthier families. This sets them up for the challenges they face during their lives: unrealized potential, financial 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 significantly more than the £3bn cost of removing the two-child cap, or extending free school meals.

That’s why we acted promptly 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 symbol to 14 years of unsuccessful rightwing ideology. Now it is abolished.

Equitable Funding for Measures

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

Final Thoughts

Fairness and direction – that’s how we will succeed in the contest of ideas. This budget is a clear statement that we gained 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 platform and define the narrative more forcefully about what’s really wrong with the country and how we are fixing it. We’ve certainly done that this week.

So let’s maintain it and win this fight about how we will renew Britain and tackle the entrenched inequalities holding us back.