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Just recently, the finance minister, Rachel Reeves, presented a Labour Party economic plan. The public have been asking for Labour’s purpose and values to be more clearly articulated. By way of the decisions made – a transition to a fairer tax system, targeting wealth to pay for addressing child poverty, quality public services and the cost of living – we have clearly set out what we stand for.

That’s why Labour MPs cheered in the Commons, and it’s why we are ready 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 dividing line in British politics is once again on the economy. On the one hand Labour, who aim to reform it so it helps everyday working people, and on the other, our opponents, who favor the status quo and the unsuccessful ideology of the past. We must now take on, and prevail in, the debate.

The Tories had 14 years to fix things and instead, by any measure, they got much worse. Their doctrinaire austerity and trickle-down economics – tax breaks for the wealthy, reducing investment (causing us with poor productivity and wages), and failing to support young people after the pandemic – proved ineffective.

Legacy of Failure 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 they’ve ever been, wages were stagnant, a housing crisis took hold, young people affected by Covid were left on the scrapheap. The history of failure continues.

A single 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 continue making the argument for why our approach will yield benefits.

Social Security and Youth Deprivation

During the Tories, welfare spending significantly increased. As did child poverty, because they failed to tackle the root causes: low pay, high housing costs, significant inequalities in education, health and regions. The state ends up paying more to manage 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, greatly increasing 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 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 endured from a cruel social experiment that was marketed 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 heartless and unethical.

Tangible Effects in Local Areas

From experience from my own constituency – 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 overcrowded, mouldy homes, parents this Christmas relying 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 severe deprivation.

Long-Term Effects of Youth Hardship

Just one in four pupils from the most disadvantaged families achieve five good GCSEs, compared with nearly three in four among affluent families. This predisposes them for the disadvantages they face during their lives: unrealized potential, financial 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 future-oriented strategy. Poverty costs the economy significantly more than the £3bn 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 benefits of lifting it will not occur overnight either, so acting early in the parliament was vital.

The cap was a totem to 14 years of failed rightwing ideology. Now it is abolished.

Fair Funding for Policies

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

Conclusion

Fairness and purpose – 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 set the agenda more strongly about what’s truly flawed with the country and how we are fixing it. We’ve definitely done that this week.

So let’s maintain it and win this fight about how we will renew Britain and address the entrenched inequalities impeding progress.