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Yesterday, the finance minister, Rachel Reeves, delivered a Labour Party economic plan. People have been asking for Labour’s purpose and principles to be more distinctly expressed. By way of the choices made – a shift to a fairer tax system, targeting wealth to pay for tackling child poverty, quality public services and the living expenses – we have unequivocally set out what we believe in.

That’s why Labour MPs cheered in the Commons, and it’s why we are up for the fights to come. And it’s why the cries from the right began right away.

The Main Political Divide in UK Politics

The central division 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 doctrine of the past. We must now confront, 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 supply-side economics – tax breaks for the wealthy, reducing investment (leaving us with poor productivity and wages), and neglecting to support young people after the pandemic – proved ineffective.

Record of Decline Under the Previous Government

Quality of life dropped by the largest margin since records began, child poverty hit record levels, NHS waiting lists in England were the highest they’ve ever been, wages were stagnant, a housing crisis took hold, 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 long-term plan for rebuilding and for rewiring the country. And we have to go out and keep making the argument for why our strategy will reap dividends.

Welfare Spending and Youth Deprivation

During the Tories, welfare spending rose substantially. As did child poverty, because they failed to tackle the underlying issues: low pay, high housing costs, deep inequalities in education, health and regions. The state is forced to paying more to manage the effects instead of the cure.

That’s why we are building more affordable homes than for a generation, increasing wages and enhanced protections 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.

Removing the Two-Child Benefit Cap

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

For almost a decade, since it was enacted, poorer families with children have suffered 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 heartless and unethical.

Real Impact in Local Areas

I know from my own constituency – where over 5,000 children will be lifted 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 hungry and cold, living in cramped, damp homes, parents during the holidays depending 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 stretched but have to redirect time and resources to supporting children who are living with the results of deep poverty.

Lasting Effects of Youth Hardship

Just a quarter of pupils from the most disadvantaged families achieve five good GCSEs, compared with almost 75% among affluent families. This predisposes them for the challenges they face during their lives: unrealized potential, financial struggles and poor health. Children who grew up in poverty are more likely to be jobless 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.

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 benefits of lifting it won’t happen overnight either, so taking early action in the parliament was vital.

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

Fair Financing for Measures

We, as Labour, can also be explicit that these initiatives are being funded in a just way – from a new gaming tax, closing tax loopholes and a new “mansion tax”.

Final Thoughts

Fairness and direction – 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 lead as Labour. As I consistently said during my campaign to become deputy leader, we must reclaim the political megaphone and define the narrative more forcefully 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 fight about how we will renew Britain and address the deep inequalities impeding progress.