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Yesterday, the finance minister, Rachel Reeves, presented a Labour Party budget. The public have been asking for Labour’s mission and principles to be more distinctly expressed. Through the decisions made – a shift to a more equitable tax system, targeting wealth to pay for tackling child poverty, quality public services and the living expenses – we have clearly demonstrated what we stand for.

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 right began right away.

The Central Dividing Line in British Government

The primary division in British politics is once again on the economy. On the one hand Labour, who aim to change it so it benefits ordinary working people, and on the opposite side, our opponents, who support the current system and the failed doctrine of the past. We must now take on, and prevail in, the argument.

The Tories had 14 years to resolve things and in reality, by every standard, they got much worse. Their ideological austerity and supply-side economics – tax breaks for the wealthy, cutting off investment (causing us with poor productivity and wages), and failing to support young people after the pandemic – proved ineffective.

Record of Failure Under the Previous Administration

Quality of life dropped by the largest margin since records began, child poverty hit 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 put all this right, so Labour has a long-term plan for rebuilding and for restructuring the country. And we have to go out and continue making the argument for why our approach will reap dividends.

Social Security and Child Poverty

Under the Tories, welfare spending rose substantially. As did child poverty, because they failed to tackle 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 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 lowering the costs of childcare and energy as we pursue clean power.

Removing the Two-Child Benefit Cap

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

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

It has only served to push 300,000 more children into poverty – which, ultimately, costs us more, as well as being heartless and immoral.

Real Impact in Local Areas

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 £1 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 divert time and resources to supporting children who are living with the consequences of deep poverty.

Lasting Effects of Youth Hardship

Just a quarter of pupils from the most disadvantaged families achieve five good GCSEs, compared with almost 75% among wealthier families. This sets them up for the disadvantages they face during 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.

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

This is the reason we acted promptly in the budget, despite the very difficult economic context. Every day with this cap in place sees more than 100 extra children pushed into poverty. The benefits of lifting it won’t happen overnight either, so acting early in the parliament was vital.

The cap was a totem to 14 years of unsuccessful rightwing ideology. Now it is abolished.

Equitable Financing for Measures

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

Conclusion

Equity and direction – that’s how we will win the battle of ideas. This budget is a definitive statement that we won 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 megaphone and set the agenda more strongly about what’s really wrong with the country and how we are repairing it. We’ve definitely done that this week.

So let’s keep hold of it and prevail in this struggle about how we will rebuild Britain and address the deep inequalities holding us back.