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Just recently, the finance minister, Rachel Reeves, delivered a Labour economic plan. People have been asking for Labour’s purpose and values to be more clearly articulated. Through the choices made – a transition to a fairer tax system, focusing on wealth to fund tackling child poverty, quality public services and the living expenses – we have clearly set out what we stand for.

This is why Labour MPs applauded in the Commons, and it’s why we are ready for the fights to come. And it’s why the protests from the right began immediately.

The Main Dividing Line in British Politics

The central division in British politics is once again on the economy. On the one side Labour, who want to change it so it helps ordinary working people, and on the opposite side, our political opponents, who support the current system and the unsuccessful ideology of the past. We must now take on, and win, the debate.

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 breaks for the wealthy, reducing investment (leaving us with poor productivity and wages), and failing to support young people post-Covid – proved ineffective.

Record of Decline Under the Previous Government

Living standards fell by the largest margin 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 goes on.

A single budget alone can’t put all this right, so Labour has a comprehensive plan for rebuilding and for rewiring 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

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

It’s why we are constructing 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 drive for clean power.

Removing the Two-Child Limit

This is also the reason 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 cruel social experiment that was branded as fair for working people when it was anything but. Most of the families impacted by it have a parent in work.

It’s done nothing but push 300,000 more children into poverty – which, in the end, costs us more, as well as being heartless and immoral.

Real Impact in Communities

I know from my own district – where over 5,000 children will be lifted 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 hungry and cold, living in cramped, 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 redirect time and resources to supporting children who are living with the consequences of deep poverty.

Lasting Consequences of Child Poverty

Just one in four pupils from the poorest families achieve five good GCSEs, compared with nearly three in four among wealthier families. This predisposes them for the disadvantages they face throughout their lives: unrealized potential, economic struggles and poor health. Children who were raised in poverty are more likely to be unemployed or poor as adults.

Confronting 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 removing the two-child cap, or expanding free school meals.

That’s why we acted urgently in the budget, despite the challenging economic context. Every day with this cap in place sees over a hundred extra children pushed into poverty. The effects of lifting it won’t happen overnight either, so taking early action in the parliament was crucial.

The cap was a totem to 14 years of failed rightwing ideology. Now it is gone.

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 purpose – that’s how we will succeed in the contest of ideas. This budget is a clear statement that we gained the election as Labour, and will lead as Labour. As I repeatedly said during my campaign to become deputy leader, we must reclaim the political platform and set the agenda more forcefully about what’s really wrong with the country and how we are fixing 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 address the entrenched inequalities holding us back.