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Yesterday, the finance minister, Rachel Reeves, presented a Labour budget. People have been asking for Labour’s purpose and values to be more distinctly expressed. By way of the decisions made – a shift to a more equitable tax system, focusing on wealth to pay for tackling child poverty, good public services and the living expenses – we have clearly set out what we stand for.

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

The Central Dividing Line in British Government

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

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

Legacy of Decline Under the Former Government

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 became entrenched, young people scarred by Covid were left on the scrapheap. The record of failure goes on.

A single budget alone can’t fix everything, 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 approach will yield benefits.

Social Security and Youth Deprivation

During the Tories, welfare spending significantly increased. As did child poverty, because they failed to tackle the root causes: 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.

That’s why we are constructing 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 Benefit Cap

This is also the reason we are completely justified to use this budget to lift the two-child benefit cap.

For eight long years, 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 anything but. 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, ultimately, costs us more, as well as being heartless and immoral.

Tangible Effects 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 low-cost wellies as school shoes, children going to bed without food and cold, living in cramped, damp 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 overburdened but have to divert time and resources to supporting children who are living with the consequences of deep poverty.

Lasting Effects of Child Poverty

Just one in four pupils from the poorest families achieve five good GCSEs, compared with nearly three in four among wealthier families. This sets them up for the disadvantages they face during their lives: unrealized potential, financial struggles and ill health. Children who were raised 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 £3bn cost of removing the two-child cap, or extending 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 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 crucial.

The cap was a totem to 14 years of failed conservative 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 just way – from a new gambling levy, eliminating tax loopholes and a new “mansion tax”.

Final Thoughts

Fairness and direction – that’s how we will win the contest of ideas. This budget is a definitive 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 seize back the political megaphone and set the agenda more strongly 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 struggle about how we will renew Britain and tackle the entrenched inequalities impeding progress.