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Just recently, the finance minister, Rachel Reeves, delivered a Labour Party budget. People have been calling for Labour’s purpose and values to be more clearly articulated. By way of the decisions made – a transition to a more equitable tax system, focusing on wealth to pay for tackling child poverty, good public services and the cost of living – we have unequivocally demonstrated what we stand for.

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

The Central Political Divide in British Politics

The central division in British politics is yet again on the economy. On the one side Labour, who want to reform it so it benefits ordinary working people, and on the opposite side, our political opponents, who favor the status quo and the failed ideology of the past. We must now take on, and win, the debate.

The Tories had 14 years to resolve things and instead, by any measure, they got far more dire. Their ideological austerity and supply-side economics – tax cuts for the wealthy, reducing investment (leaving us with low productivity and wages), and failing to support young people post-Covid – proved ineffective.

Record of Failure 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 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.

One budget alone can’t put all this right, so Labour has a comprehensive plan for renewal and for restructuring the country. And we have to go out and keep making the case for why our approach will yield benefits.

Welfare Spending and Child Poverty

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 symptoms instead of the solution.

It’s why we are constructing more affordable homes than for a generation, increasing wages and enhanced protections 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 Benefit Cap

This is also the reason we are absolutely right 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 suffered from a cruel 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’s done nothing but push 300,000 more children into poverty – which, in the end, costs us more, as well as being callous and unethical.

Real Impact in Communities

From experience from my own district – where over 5,000 children will be lifted out of poverty as a result of abolishing 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 this Christmas 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 severe deprivation.

Long-Term Effects of Child Poverty

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 ill health. Children who were raised in poverty are more likely to be unemployed 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 £3bn cost of lifting the two-child cap, or extending free school meals.

That’s why we acted urgently in the budget, despite the very difficult economic context. Every day with this cap in place sees over a hundred 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 totem to 14 years of unsuccessful rightwing ideology. Now it is gone.

Fair Funding for Measures

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

Final Thoughts

Equity and purpose – that’s how we will win the battle of ideas. This budget is a clear statement that we gained the election as Labour, and will lead 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 strongly about what’s truly flawed with the country and how we are fixing it. We’ve definitely done that this week.

So let’s keep hold of it and win this struggle about how we will rebuild Britain and tackle the deep inequalities impeding progress.