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Yesterday, the finance minister, Rachel Reeves, presented a Labour Party budget. The public have been asking for Labour’s mission and principles to be more clearly expressed. Through the decisions made – a transition to a more equitable tax system, targeting wealth to fund addressing child poverty, quality public services and the living expenses – we have unequivocally set out what we stand for.

This is 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 conservative side began immediately.

The Main Political Divide in British Politics

The central dividing line in British politics is yet again on the economy. On the one side Labour, who aim to change it so it benefits everyday working people, and on the opposite side, our political opponents, who support 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 much worse. Their ideological austerity and supply-side economics – tax breaks for the wealthy, reducing investment (causing us with poor productivity and wages), and neglecting to support young people after the pandemic – didn’t work.

Record of Decline Under the Former Government

Quality of life fell by the biggest amount since records began, child poverty hit record levels, NHS waiting lists in England were the highest on record, wages were stagnant, a housing crisis became entrenched, young people affected by Covid were left on the scrapheap. The history of failure continues.

One budget alone can’t fix everything, so Labour has a comprehensive plan for renewal and for rewiring the country. And we have to go out and keep 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 is forced to 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, massively boosting 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 absolutely right to use this budget to remove the two-child benefit cap.

For almost a decade, since it was introduced, low-income 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 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.

Real Impact in Communities

From experience from my own district – where over 5,000 children will be raised out of poverty as a result of abolishing the cap – the actual impact it’s had. Children wearing low-cost wellies as school shoes, children going to bed without food and cold, living in overcrowded, damp homes, parents this Christmas relying 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 divert time and resources to supporting children who are living with the consequences of severe deprivation.

Lasting Effects of Child Poverty

Just one in four 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: unrealized potential, economic struggles and ill 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 significantly more than the £3bn cost of lifting the two-child cap, or extending free school meals.

This is the reason we acted promptly 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 won’t happen overnight either, so acting early in the parliament was crucial.

The cap was a symbol to 14 years of failed conservative ideology. Now it is gone.

Fair Financing for Policies

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

Final Thoughts

Equity and direction – that’s how we will win the battle of ideas. This budget is a definitive statement that we won 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 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 prevail in this struggle about how we will rebuild Britain and tackle the deep inequalities impeding progress.