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Just recently, the finance minister, Rachel Reeves, delivered a Labour budget. People have been calling for Labour’s purpose and values to be more clearly articulated. Through the decisions made – a shift to a more equitable tax system, focusing on wealth to fund tackling child poverty, quality public services and the cost of living – we have clearly demonstrated what we believe in.

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 cries from the conservative side began immediately.

The Main Dividing Line in UK Government

The central division in British politics is yet again on the economy. On the one hand Labour, who aim to change it so it benefits ordinary working people, and on the opposite side, our political opponents, who support the status quo and the unsuccessful doctrine 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 doctrinaire austerity and supply-side 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.

Record of Failure 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 they’ve ever been, wages were stagnant, a housing crisis took hold, young people affected by Covid were abandoned. The record of failure continues.

One budget alone can’t put all this right, so Labour has a long-term plan for rebuilding and for restructuring the country. And we have to go out and continue making the argument for why our approach will yield benefits.

Welfare Spending and Child Poverty

Under the Tories, welfare spending rose substantially. 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 ends up paying more to manage the symptoms instead of the solution.

It’s why we are building more social housing than for a generation, increasing wages and new rights for workers, massively boosting investment in infrastructure and new industries, getting waiting lists down and lowering the costs of childcare and energy as we pursue clean power.

Ending the Two-Child Limit

It’s also why 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 endured from a cruel social experiment that was marketed as fair for working people when it was anything but. 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 callous and unethical.

Tangible Effects in Local Areas

I know from my own district – 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 during the holidays depending 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 divert time and resources to supporting children who are living with the consequences of severe deprivation.

Lasting Consequences of Child Poverty

Just one in four pupils from the most disadvantaged 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, financial 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 ethical duty, it is a long-term investment. Poverty costs the economy significantly more than the three billion pound 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 more than 100 additional children pushed into poverty. The effects 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 unsuccessful conservative ideology. Now it is gone.

Equitable Funding for Policies

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

Final Thoughts

Equity and direction – that’s how we will succeed in the battle 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 megaphone and define the narrative more forcefully about what’s really wrong with the country and how we are repairing it. We’ve certainly done that this week.

So let’s maintain it and prevail in this struggle about how we will rebuild Britain and tackle the entrenched inequalities holding us back.