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Yesterday, the finance minister, Rachel Reeves, presented a Labour budget. People have been calling for Labour’s mission and values to be more clearly expressed. Through the choices made – a transition to a fairer tax system, focusing on wealth to fund addressing child poverty, good public services and the cost of living – 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 battles to come. And it’s why the protests from the conservative side began immediately.

The Central Political Divide in UK Politics

The central dividing line in British politics is yet again on the economy. On the one hand Labour, who want to reform it so it benefits everyday working people, and on the opposite side, our political opponents, who support the status quo and the failed doctrine of the past. We must now confront, and prevail in, the argument.

The Tories were given 14 years to fix things and instead, by any measure, they got much worse. Their ideological austerity and trickle-down economics – tax cuts for the wealthy, reducing investment (leaving us with poor productivity and wages), and neglecting to support young people post-Covid – didn’t work.

Legacy of Decline 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 on record, wages remained flat, a housing crisis took hold, young people scarred by Covid were abandoned. The record of failure continues.

A single budget alone can’t fix everything, so Labour has a comprehensive plan for rebuilding and for restructuring the country. And we have to go out and continue making the argument for why our approach will reap dividends.

Welfare Spending and Youth Deprivation

Under the Tories, welfare spending rose substantially. As did child poverty, because they didn’t address the root causes: low pay, high housing costs, significant inequalities in education, health and regions. The state is forced to paying more to deal with the symptoms instead of the solution.

It’s why we are constructing more social housing than for a generation, raising wages and new rights 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 pursue clean power.

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

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 cramped, damp 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 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 a quarter of pupils from the poorest families achieve five good GCSEs, compared with almost 75% among affluent families. This predisposes them for the challenges they face throughout their lives: missed potential, financial struggles and poor health. Children who grew up in poverty are more likely to be unemployed or poor as adults.

Confronting child poverty isn’t just a moral imperative, it is a future-oriented strategy. Poverty costs the economy far, far more than the £3bn cost of removing the two-child cap, or extending 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 more than 100 extra children pushed into poverty. The effects of lifting it won’t happen overnight either, so taking early action in the parliament was vital.

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

Equitable Financing for Measures

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

Final Thoughts

Fairness and direction – that’s how we will win the contest of ideas. This budget is a clear 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 keep hold of it and prevail in this fight about how we will renew Britain and tackle the entrenched inequalities holding us back.