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Just recently, the chancellor, Rachel Reeves, delivered a Labour budget. The public have been asking for Labour’s mission and principles to be more clearly articulated. Through the choices made – a transition to a fairer tax system, focusing on wealth to fund addressing child poverty, quality public services and the cost of living – we have unequivocally 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 protests from the conservative side began immediately.

The Main Dividing Line in UK Government

The primary division in British politics is once again on the economy. On the one side Labour, who aim to change it so it benefits everyday working people, and on the other, our political opponents, who favor the status quo and the failed ideology of the past. We must now confront, and win, the debate.

The Tories were given 14 years to fix things and in reality, by every standard, they got much worse. Their ideological austerity and trickle-down economics – tax cuts for the wealthy, reducing investment (causing us with poor productivity and wages), and neglecting to support young people after the pandemic – didn’t work.

Legacy of Failure Under the Former Administration

Living standards dropped by the biggest amount since records began, child poverty reached 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.

A single 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 argument for why our strategy will yield benefits.

Welfare Spending and Child Poverty

During the Tories, welfare spending rose substantially. As did child poverty, because they didn’t address 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 cure.

That’s why we are constructing more affordable homes than for a generation, increasing wages and enhanced protections for workers, greatly increasing investment in infrastructure and new industries, getting waiting lists down and bringing down the costs of childcare and energy as we pursue clean power.

Ending the Two-Child Limit

This is also the reason we are completely justified to use this budget to remove the two-child benefit cap.

For eight long years, since it was introduced, low-income families with children have endured from a unjust social experiment that was branded as fair for working people when it was the opposite. 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 heartless and unethical.

Tangible Effects in Local Areas

I know from my own constituency – 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 £1 wellies as school shoes, children going to bed hungry and cold, living in overcrowded, damp homes, parents during the holidays 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 overburdened but have to divert time and resources to supporting children who are living with the results of deep poverty.

Lasting Consequences of Child Poverty

Just a quarter of pupils from the most disadvantaged families achieve five good GCSEs, compared with nearly three in four among wealthier families. This predisposes them for the challenges they face during their lives: unrealized potential, financial struggles and ill health. Children who grew up in poverty are more likely to be unemployed or poor as adults.

Confronting child poverty isn’t just a ethical duty, it is a future-oriented strategy. 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 promptly in the budget, despite the very difficult economic context. Every day with this cap in place sees over a hundred extra 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 symbol to 14 years of failed conservative ideology. Now it is abolished.

Fair Financing for Measures

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

Conclusion

Equity and direction – that’s how we will succeed in the battle of ideas. This budget is a definitive statement that we won the election as Labour, and will govern as Labour. As I repeatedly said during my campaign to become deputy leader, we must reclaim the political platform and define the narrative more strongly about what’s truly flawed with the country and how we are repairing it. We’ve definitely done that this week.

So let’s keep hold of it and prevail in this struggle about how we will renew Britain and address the entrenched inequalities impeding progress.