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Yesterday, the finance minister, Rachel Reeves, presented a Labour budget. The public have been calling for Labour’s purpose and principles to be more clearly expressed. Through the choices made – a shift to a more equitable tax system, targeting wealth to pay for tackling child poverty, good 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 right away.

The Central Dividing Line in UK Government

The central dividing line in British politics is once again on the economy. On the one hand Labour, who aim to change it so it benefits everyday working people, and on the other, our political opponents, who support the current system and the failed ideology of the past. We must now take on, and win, the debate.

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

Legacy of Decline Under the Previous Government

Living standards 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 remained flat, a housing crisis became entrenched, young people affected by Covid were abandoned. The record of failure goes on.

A single budget alone can’t fix everything, 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 reap dividends.

Social Security and Youth Deprivation

During the Tories, welfare spending significantly increased. 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 is forced to paying more to deal with the effects instead of the solution.

It’s why we are building more affordable homes than for a generation, increasing wages and new rights for workers, greatly increasing investment in infrastructure and new industries, reducing 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 almost a decade, since it was introduced, poorer families with children have endured from a unjust 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 has only served to 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 real impact it’s had. Children wearing low-cost wellies as school shoes, children going to bed without food and cold, living in overcrowded, mouldy 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 overburdened but have to redirect time and resources to supporting children who are living with the results of severe deprivation.

Lasting Effects of Child Poverty

Just a quarter of pupils from the most disadvantaged families achieve five good GCSEs, compared with almost 75% among affluent families. This sets them up for the disadvantages they face during their lives: unrealized potential, economic struggles and ill health. Children who were raised 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 far, far 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 extra children pushed into poverty. The effects of lifting it will not occur overnight either, so taking early action in the parliament was vital.

The cap was a totem to 14 years of unsuccessful conservative ideology. Now it is abolished.

Equitable Financing for Policies

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”.

Conclusion

Equity and purpose – that’s how we will succeed in the contest of ideas. This budget is a definitive 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 platform 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 win this fight about how we will renew Britain and tackle the deep inequalities holding us back.