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Just recently, the chancellor, Rachel Reeves, delivered a Labour Party budget. People have been calling for Labour’s purpose and principles to be more distinctly articulated. Through the choices made – a transition to a more equitable tax system, targeting wealth to fund tackling child poverty, quality 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 right began immediately.

The Main Dividing Line in UK Government

The primary dividing line in British politics is once again on the economy. On the one side Labour, who aim to change it so it helps ordinary working people, and on the other, our political opponents, who support the current system and the unsuccessful ideology of the past. We must now confront, and win, the argument.

The Tories had 14 years to fix things and instead, by any measure, they got far more dire. Their doctrinaire austerity and supply-side economics – tax cuts for the wealthy, cutting off investment (leaving us with poor productivity and wages), and failing to support young people after the pandemic – didn’t work.

Record of Failure Under the Former Government

Living standards dropped by the largest margin since records began, child poverty reached record levels, NHS waiting lists in England were the highest they’ve ever been, wages remained flat, a housing crisis became entrenched, young people affected by Covid were abandoned. The history of failure continues.

A single 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 case for why our approach will reap dividends.

Social Security and Youth Deprivation

Under the Tories, welfare spending rose substantially. As did child poverty, because they failed to tackle the underlying issues: low pay, high housing costs, deep inequalities in education, health and regions. The state ends up paying more to manage the effects instead of the cure.

It’s why we are building more affordable homes than for a generation, raising 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 drive for clean power.

Removing the Two-Child Limit

It’s also why we are completely justified to use this budget to lift the two-child benefit cap.

For almost a decade, since it was enacted, poorer families with children have suffered from a unjust social experiment that was branded as fair for working people when it was anything but. Most of the families affected by it have a parent in work.

It has only served to push 300,000 more children into poverty – which, in the end, costs us more, as well as being callous and immoral.

Tangible Effects in Communities

From experience from my own district – where over 5,000 children will be lifted out of poverty as a result of ending the cap – the real 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 results of deep poverty.

Long-Term Consequences of Youth Hardship

Just a quarter of 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 challenges they face throughout their lives: missed potential, economic struggles and poor health. Children who grew up in poverty are more likely to be jobless or poor as adults.

Addressing child poverty isn’t just a moral imperative, it is a long-term investment. Poverty costs the economy far, far more than the three billion pound cost of lifting the two-child cap, or extending free school meals.

This is the reason we acted urgently 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 rightwing ideology. Now it is gone.

Equitable Financing 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”.

Final Thoughts

Equity and purpose – that’s how we will succeed in the contest of ideas. This budget is a clear statement that we won the election as Labour, and will lead as Labour. As I repeatedly said during my campaign to become deputy leader, we must seize back the political platform and set the agenda more forcefully about what’s truly flawed 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 renew Britain and tackle the entrenched inequalities impeding progress.