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Just recently, the chancellor, Rachel Reeves, delivered a Labour Party budget. People have been calling for Labour’s purpose and principles to be more distinctly articulated. By way of the decisions made – a transition 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 cries from the right began immediately.

The Central Dividing Line in UK Politics

The primary dividing line in British politics is once again on the economy. On the one hand Labour, who want to change it so it helps ordinary working people, and on the opposite side, our political opponents, who favor the current system and the failed doctrine of the past. We must now take on, and win, the debate.

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

Record of Decline Under the Previous Administration

Living standards dropped by the biggest amount since records began, child poverty hit record levels, NHS waiting lists in England were the highest on record, wages remained flat, a housing crisis became entrenched, young people scarred by Covid were abandoned. The record of failure continues.

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 argument for why our strategy will reap dividends.

Social Security and Child Poverty

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 ends up paying more to manage the effects instead of the solution.

It’s why we are constructing more social housing 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 pursue clean power.

Ending the Two-Child Limit

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

For eight long years, since it was enacted, low-income 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 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 heartless and immoral.

Real Impact in Local Areas

From experience from my own district – where over 5,000 children will be raised 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 without food and cold, living in overcrowded, damp 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 results of severe deprivation.

Lasting Consequences of Youth Hardship

Just a quarter of pupils from the poorest families achieve five good GCSEs, compared with almost 75% among wealthier families. This predisposes them for the challenges they face throughout their lives: unrealized potential, economic 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 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.

This is the reason we acted urgently 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 symbol to 14 years of failed rightwing ideology. Now it is abolished.

Fair Financing for Policies

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

Conclusion

Equity and direction – that’s how we will win the contest of ideas. This budget is a clear statement that we gained the election as Labour, and will lead as Labour. As I repeatedly said during my campaign to become deputy leader, we must reclaim the political platform and define the narrative more forcefully about what’s really wrong with the country and how we are repairing it. We’ve definitely done that this week.

So let’s maintain it and win this fight about how we will renew Britain and address the deep inequalities impeding progress.