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Yesterday, the finance minister, Rachel Reeves, presented a Labour economic plan. The public have been asking for Labour’s mission and values to be more distinctly articulated. Through the decisions made – a shift to a fairer tax system, targeting wealth to fund addressing child poverty, good public services and the cost of living – we have clearly set out what we stand for.

This is 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 conservative side began right away.

The Central Political Divide in British Politics

The central division in British politics is once again on the economy. On the one side Labour, who aim to reform it so it benefits ordinary working people, and on the other, our opponents, who favor the current system and the unsuccessful ideology of the past. We must now take on, and prevail in, the debate.

The Tories were given 14 years to fix things and instead, by every standard, they got much worse. Their doctrinaire austerity and trickle-down economics – tax breaks for the wealthy, cutting off investment (causing us with low productivity and wages), and neglecting to support young people post-Covid – didn’t work.

Record of Decline Under the Former 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 they’ve ever been, wages were stagnant, a housing crisis took hold, young people scarred by Covid were left on the scrapheap. The history of failure continues.

One budget alone can’t fix everything, so Labour has a comprehensive plan for renewal and for rewiring the country. And we have to go out and continue making the argument for why our approach will reap dividends.

Welfare Spending and Child Poverty

During the Tories, welfare spending significantly increased. 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 is forced to paying more to manage the symptoms instead of the cure.

That’s why we are constructing more social housing than for a generation, increasing wages and enhanced protections for workers, massively boosting investment in infrastructure and new industries, getting waiting lists down and lowering the costs of childcare and energy as we drive for clean power.

Ending 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 introduced, poorer families with children have suffered from a unjust social experiment that was branded 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, in the end, costs us more, as well as being callous and immoral.

Tangible Effects in Local Areas

From experience from my own constituency – where over 5,000 children will be lifted out of poverty as a result of abolishing 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, mouldy homes, parents this Christmas depending 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 redirect time and resources to supporting children who are living with the results of deep poverty.

Lasting Consequences 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 predisposes them for the challenges they face during their lives: unrealized potential, economic struggles and ill health. Children who grew up in poverty are more likely to be unemployed or poor as adults.

Confronting child poverty isn’t just a ethical duty, it is a long-term investment. Poverty costs the economy significantly more than the three billion pound cost of lifting the two-child cap, or expanding free school meals.

That’s why we acted promptly in the budget, despite the very difficult economic context. Every day with this cap in place sees over a hundred additional children pushed into poverty. The effects of lifting it will not occur overnight either, so taking early action in the parliament was vital.

The cap was a symbol to 14 years of unsuccessful rightwing 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

Fairness and purpose – 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 govern 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 strongly about what’s truly flawed with the country and how we are fixing it. We’ve definitely done that this week.

So let’s maintain it and prevail in this struggle about how we will rebuild Britain and address the entrenched inequalities impeding progress.