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Yesterday, the chancellor, Rachel Reeves, delivered a Labour economic plan. People have been asking for Labour’s mission and values to be more distinctly expressed. Through the choices made – a shift to a fairer tax system, targeting wealth to pay for addressing child poverty, quality public services and the living expenses – we have clearly set out what we believe in.

That’s 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 immediately.

The Central Dividing Line in British Government

The primary dividing line in British politics is once again on the economy. On the one hand Labour, who want to reform it so it helps ordinary working people, and on the opposite side, our opponents, who favor the status quo and the unsuccessful doctrine of the past. We must now confront, and win, the debate.

The Tories had 14 years to resolve things and instead, by any measure, they got much worse. Their ideological austerity and supply-side economics – tax breaks for the wealthy, cutting off investment (leaving us with low productivity and wages), and failing to support young people post-Covid – didn’t work.

Record of Failure Under the Previous Administration

Quality of life dropped by the biggest amount since records began, child poverty reached record levels, NHS waiting lists in England were the highest on record, wages were stagnant, a housing crisis took hold, 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 comprehensive plan for renewal and for restructuring the country. And we have to go out and continue making the case for why our strategy will reap dividends.

Social Security and Youth Deprivation

During the Tories, welfare spending rose substantially. As did child poverty, because they failed to tackle the root causes: 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 cure.

That’s why we are building more social housing than for a generation, raising wages and new rights for workers, massively boosting 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

It’s also why we are absolutely right 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 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.

Tangible Effects in Local Areas

I know from my own district – where over 5,000 children will be lifted out of poverty as a result of ending the cap – the actual impact it’s had. Children wearing £1 wellies as school shoes, children going to bed hungry and cold, living in cramped, mouldy homes, parents during the holidays relying 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 results of deep poverty.

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 predisposes them for the disadvantages they face throughout their lives: missed potential, economic 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 far, far more than the three billion pound cost of removing the two-child cap, or extending free school meals.

This is the reason we acted promptly 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 unsuccessful conservative ideology. Now it is gone.

Equitable Funding for Measures

We, as Labour, can also be clear that these measures are being paid for in a fair way – from a new gambling levy, closing 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 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 set the agenda 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 keep hold of it and win this fight about how we will renew Britain and address the deep inequalities impeding progress.