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Yesterday, the finance minister, Rachel Reeves, presented a Labour Party economic plan. People have been asking for Labour’s mission and values to be more clearly expressed. By way of the decisions made – a transition to a more equitable tax system, targeting wealth to fund tackling child poverty, good public services and the living expenses – we have unequivocally set out what we believe in.

That’s why Labour MPs cheered in the Commons, and it’s why we are ready for the battles to come. And it’s why the protests from the conservative side began right away.

The Main Dividing Line in British Government

The primary division in British politics is yet again on the economy. On the one hand Labour, who want to change it so it helps everyday working people, and on the other, our opponents, who favor the current system and the unsuccessful doctrine of the past. We must now take on, and prevail in, the argument.

The Tories were given 14 years to fix things and instead, by every standard, they got far more dire. Their doctrinaire 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 Decline Under the Former Administration

Quality of life 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 took hold, young people scarred by Covid were abandoned. The history of failure continues.

One budget alone can’t fix everything, so Labour has a comprehensive plan for rebuilding and for restructuring the country. And we have to go out and keep making the argument for why our strategy will yield benefits.

Welfare Spending and Child Poverty

Under the Tories, welfare spending rose substantially. As did child poverty, because they didn’t address the root causes: low pay, high housing costs, significant inequalities in education, health and regions. The state ends up paying more to deal with the symptoms instead of the solution.

That’s why we are building more affordable homes than for a generation, increasing wages and enhanced protections for workers, massively boosting investment in infrastructure and new industries, reducing waiting lists down and bringing down the costs of childcare and energy as we pursue clean power.

Ending the Two-Child Limit

This is also the reason we are completely justified to use this budget to remove the two-child benefit cap.

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

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

Tangible Effects in Communities

I know from my own constituency – 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 overcrowded, mouldy homes, parents this Christmas 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 overburdened but have to redirect time and resources to supporting children who are living with the consequences of severe deprivation.

Lasting Effects of Child Poverty

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 disadvantages they face throughout their lives: missed potential, financial struggles and poor health. Children who grew up in poverty are more likely to be unemployed or poor as adults.

Addressing child poverty isn’t just a ethical duty, it is a future-oriented strategy. Poverty costs the economy far, far more than the three billion pound cost of removing the two-child cap, or expanding free school meals.

This is the reason we acted urgently in the budget, despite the very difficult 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 acting early in the parliament was vital.

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

Fair Financing for Policies

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

Final Thoughts

Equity and direction – 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 govern as Labour. As I repeatedly said during my campaign to become deputy leader, we must seize back the political megaphone and set the agenda more strongly about what’s truly flawed with the country and how we are fixing it. We’ve certainly done that this week.

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