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Just recently, the chancellor, Rachel Reeves, presented a Labour Party budget. People have been asking for Labour’s mission and principles to be more clearly expressed. Through the decisions made – a shift to a fairer tax system, focusing on wealth to fund tackling child poverty, good public services and the living expenses – we have clearly set out what we stand for.

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

The Main Dividing Line in British Government

The primary division in British politics is once again on the economy. On the one hand Labour, who aim to reform it so it benefits everyday working people, and on the other, our political opponents, who support the status quo and the unsuccessful doctrine of the past. We must now take on, and prevail in, the debate.

The Tories had 14 years to fix things and instead, by every standard, they got much worse. Their ideological austerity and supply-side economics – tax breaks for the wealthy, reducing investment (leaving us with low productivity and wages), and failing to support young people post-Covid – didn’t work.

Record of Decline Under the Former Administration

Quality of life dropped 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 scarred by Covid were left on the scrapheap. The history of failure goes on.

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

Welfare Spending and Youth Deprivation

During the Tories, welfare spending significantly increased. 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 ends up paying more to deal with the effects instead of the cure.

That’s why we are building more affordable homes than for a generation, raising wages and enhanced protections for workers, massively boosting investment in infrastructure and new industries, reducing 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 completely justified to use this budget to lift the two-child benefit cap.

For eight long years, since it was introduced, low-income families with children have suffered from a unjust social experiment that was branded as fair for working people when it was anything but. 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, ultimately, costs us more, as well as being callous and immoral.

Tangible Effects 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 hungry and cold, living in overcrowded, mouldy 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 overburdened but have to redirect time and resources to supporting children who are living with the consequences of severe deprivation.

Long-Term Effects 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 predisposes them for the challenges they face during their lives: missed potential, economic struggles and poor health. Children who were raised in poverty are more likely to be jobless or poor as adults.

Addressing child poverty isn’t just a moral imperative, it is a long-term investment. Poverty costs the economy significantly more than the £3bn cost of lifting the two-child cap, or extending free school meals.

That’s why we acted promptly in the budget, despite the challenging economic context. Every day with this cap in place sees over a hundred extra children pushed into poverty. The effects of lifting it won’t happen overnight either, so taking early action in the parliament was crucial.

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

Fair Financing for Measures

We, as Labour, can also be explicit that these measures are being paid for in a fair way – from a new gaming tax, closing tax loopholes and a new “mansion tax”.

Conclusion

Equity and direction – that’s how we will win the contest of ideas. This budget is a definitive statement that we gained the election as Labour, and will govern as Labour. As I repeatedly said during my campaign to become deputy leader, we must seize back the political megaphone and define the narrative 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 win this fight about how we will renew Britain and tackle the deep inequalities holding us back.