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Yesterday, the finance minister, Rachel Reeves, presented a Labour Party budget. The public have been asking for Labour’s purpose and principles to be more distinctly articulated. Through the decisions made – a shift to a more equitable tax system, focusing on wealth to fund tackling child poverty, quality 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 fights to come. And it’s why the cries from the conservative side began right away.

The Main Political Divide in UK Politics

The central division in British politics is once again on the economy. On the one side Labour, who want to change it so it benefits ordinary working people, and on the other, our political opponents, who favor the current system and the failed ideology of the past. We must now confront, and prevail in, the debate.

The Tories had 14 years to fix things and instead, by every standard, they got far more dire. Their doctrinaire austerity and trickle-down economics – tax breaks for the wealthy, reducing investment (causing us with low productivity and wages), and neglecting to support young people after the pandemic – didn’t work.

Legacy of Failure Under the Former Administration

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

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

Welfare Spending and Child Poverty

Under the Tories, welfare spending significantly increased. 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 ends up paying more to deal with the symptoms instead of the solution.

It’s why we are building more social housing than for a generation, increasing wages and enhanced protections 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.

Removing 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 affected by it have a parent in work.

It has only served to push 300,000 more children into poverty – which, ultimately, costs us more, as well as being heartless and immoral.

Real Impact in Communities

I know 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 without food 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 redirect time and resources to supporting children who are living with the consequences of deep poverty.

Long-Term Consequences of Youth Hardship

Just one in four pupils from the most disadvantaged families achieve five good GCSEs, compared with almost 75% among wealthier families. This sets them up for the challenges they face during 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.

Addressing child poverty isn’t just a ethical duty, it is a long-term investment. Poverty costs the economy far, far more than the £3bn cost of lifting 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 more than 100 additional children pushed into poverty. The benefits of lifting it won’t happen overnight either, so acting early in the parliament was vital.

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

Fair Funding for Measures

We, as Labour, can also be clear that these initiatives are being paid for in a just way – from a new gaming tax, eliminating tax loopholes and a new “mansion tax”.

Final Thoughts

Fairness and purpose – that’s how we will succeed in the battle of ideas. This budget is a definitive 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 reclaim the political megaphone and set the agenda more forcefully about what’s really wrong with the country and how we are repairing it. We’ve definitely done that this week.

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