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Yesterday, the finance minister, Rachel Reeves, delivered a Labour budget. The public have been asking for Labour’s mission and values to be more distinctly articulated. By way of the choices made – a shift to a fairer tax system, targeting wealth to fund tackling child poverty, good public services and the cost of living – we have clearly 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 cries from the right began immediately.

The Main Dividing Line in UK Government

The central dividing line in British politics is once again on the economy. On the one hand Labour, who want to change it so it benefits ordinary working people, and on the opposite side, our opponents, who support the status quo and the unsuccessful doctrine of the past. We must now take on, and win, the debate.

The Tories were given 14 years to resolve things and in reality, by every standard, they got much worse. Their doctrinaire austerity and supply-side economics – tax cuts for the wealthy, reducing investment (causing us with low productivity and wages), and failing to support young people after the pandemic – proved ineffective.

Record of Decline Under the Previous Administration

Quality of life 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 took hold, young people affected by Covid were abandoned. The history of failure goes on.

One budget alone can’t put all this right, so Labour has a long-term plan for rebuilding and for restructuring the country. And we have to go out and continue making the case for why our strategy will reap dividends.

Social Security and Child Poverty

Under the Tories, welfare spending significantly increased. As did child poverty, because they failed to tackle the underlying issues: low pay, high housing costs, significant inequalities in education, health and regions. The state ends up paying more to deal with the effects instead of the solution.

It’s why we are building more social housing than for a generation, raising wages and new rights for workers, greatly increasing investment in infrastructure and new industries, reducing waiting lists down and lowering the costs of childcare and energy as we drive for 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 enacted, low-income families with children have endured from a cruel social experiment that was branded as fair for working people when it was anything but. Most of the families affected 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 callous and immoral.

Tangible Effects 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 low-cost wellies as school shoes, children going to bed hungry and cold, living in cramped, mouldy homes, parents during the holidays 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 stretched but have to divert time and resources to supporting children who are living with the results of severe deprivation.

Lasting Effects of Youth Hardship

Just a quarter of pupils from the poorest families achieve five good GCSEs, compared with nearly three in four among wealthier families. This sets them up 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.

Addressing child poverty isn’t just a moral imperative, 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 expanding 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 will not occur overnight either, so taking early action in the parliament was crucial.

The cap was a totem to 14 years of unsuccessful rightwing ideology. Now it is gone.

Fair Financing for Policies

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

Conclusion

Fairness and direction – that’s how we will win the contest of ideas. This budget is a clear statement that we gained 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 platform 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 tackle the entrenched inequalities impeding progress.