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Yesterday, the finance minister, Rachel Reeves, presented a Labour Party economic plan. People have been calling for Labour’s mission 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 set out what we stand for.

That’s why Labour MPs applauded in the Commons, and it’s why we are up for the battles to come. And it’s why the cries from the right began right away.

The Main Dividing Line in British Politics

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

The Tories were given 14 years to fix things and in reality, by any measure, they got far more dire. Their ideological austerity and supply-side economics – tax breaks for the wealthy, cutting off investment (causing us with poor productivity and wages), and neglecting to support young people post-Covid – didn’t work.

Record of Decline Under the Previous Administration

Quality of life fell by the biggest amount 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 left on the scrapheap. The record of failure continues.

One budget alone can’t put all this right, so Labour has a long-term plan for rebuilding and for rewiring the country. And we have to go out and keep making the case for why our strategy will yield benefits.

Welfare Spending and Youth Deprivation

Under the Tories, welfare spending rose substantially. 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 ends up paying more to deal with the effects instead of the cure.

It’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, getting waiting lists down and bringing down the costs of childcare and energy as we drive for clean power.

Ending the Two-Child Limit

It’s also why we are absolutely right to use this budget to remove the two-child benefit cap.

For eight long years, since it was enacted, 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 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 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 ending 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 overcrowded, damp homes, parents this Christmas 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 consequences of deep poverty.

Lasting Consequences of Youth Hardship

Just one in four pupils from the most disadvantaged 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: missed potential, financial struggles and poor health. Children who grew up in poverty are more likely to be jobless or poor as adults.

Addressing child poverty isn’t just a moral imperative, it is a future-oriented strategy. 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 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 benefits of lifting it won’t happen overnight either, so acting early in the parliament was crucial.

The cap was a symbol to 14 years of failed rightwing ideology. Now it is abolished.

Fair Funding for Policies

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

Conclusion

Equity and direction – that’s how we will succeed in the battle of ideas. This budget is a clear 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 reclaim the political platform and set the agenda more forcefully about what’s truly flawed with the country and how we are fixing it. We’ve certainly done that this week.

So let’s maintain it and win this fight about how we will rebuild Britain and address the deep inequalities holding us back.