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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 clearly articulated. Through the decisions made – a transition to a more equitable tax system, focusing on wealth to pay for tackling child poverty, quality public services and the living expenses – we have unequivocally demonstrated what we believe in.

That’s why Labour MPs applauded 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 Politics

The primary dividing line in British politics is yet again on the economy. On the one hand Labour, who want to change it so it benefits ordinary working people, and on the opposite side, our political opponents, who support the status quo and the failed doctrine of the past. We must now confront, and prevail in, the debate.

The Tories had 14 years to resolve things and in reality, by every standard, they got far more dire. Their ideological austerity and supply-side economics – tax cuts for the wealthy, cutting off investment (leaving us with poor productivity and wages), and neglecting to support young people after the pandemic – didn’t work.

Record of Decline Under the Previous Administration

Quality of life fell 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 were stagnant, a housing crisis took hold, young people affected by Covid were left on the scrapheap. The record of failure goes on.

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

Social Security and Youth Deprivation

Under the Tories, welfare spending significantly increased. 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 manage the effects instead of the cure.

That’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, reducing waiting lists down and lowering the costs of childcare and energy as we drive for clean power.

Removing the Two-Child Benefit Cap

It’s also why we are absolutely right to use this budget to lift 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 branded as fair for working people when it was the opposite. Most of the families impacted by it have a parent in work.

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

Real Impact in Communities

I know from my own district – where over 5,000 children will be lifted out of poverty as a result of abolishing 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 cramped, 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 divert time and resources to supporting children who are living with the results of severe deprivation.

Long-Term Consequences of Youth Hardship

Just one in four pupils from the poorest 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 were raised in poverty are more likely to be unemployed or poor as adults.

Confronting child poverty isn’t just a ethical duty, it is a future-oriented strategy. Poverty costs the economy significantly more than the three billion pound cost of lifting 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 more than 100 extra children pushed into poverty. The benefits of lifting it won’t happen overnight either, so taking early action in the parliament was vital.

The cap was a totem to 14 years of failed rightwing ideology. Now it is gone.

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 gaming tax, eliminating tax loopholes and a new “mansion tax”.

Conclusion

Equity 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 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 strongly about what’s really wrong with the country and how we are fixing it. We’ve definitely done that this week.

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