27 AUGUST 2024 | NEWS
The Prime Minister, Sir Keir Starmer, warned of a “painful” October Budget earlier today in a speech from the Downing Street rose garden.
He accused the Conservatives of leaving a £22bn black hole in the public finances, echoing the claims made by the Chancellor of the Exchequer, Rachel Reeves, in late July. The speech offered the clearest indication yet that some tax rises will be announced in the autumn.
In his first major speech since becoming Prime Minister, Sir Keir claimed the situation was “worse than we ever imagined”, warning that those with the “broadest shoulders should bear the heavier burden”.
The Government has already announced some savings, including limiting the winter fuel payment to those on pension credit and the scrapping of certain infrastructure projects. The Budget will be delivered by Reeves on 30 October.
Sir Keir added: “In the first few weeks, we discovered a £22bn black hole in the public finances. And before anyone says ‘oh, this is just performative or playing politics’, let’s remember the OBR did not know about it. They wrote a letter setting that out.
“They didn’t know because the last government hid it and, even last Wednesday – just last Wednesday – we found out that, thanks to the last government’s recklessness, we borrowed almost £5bn more than the OBR expected in the last three months alone. That’s not performative, that’s fact.”
Addressing the decision taken by the Chancellor in late July, the PM said that he “didn’t want to means-test the winter fuel payment, but it was a choice that we had to make”.
Sir Keir also addressed the recent rioting, blaming it on the previous government. He said that rioters “saw the cracks in our society after 14 years of failure and exploited them”, accusing the Conservatives of leaving a “societal black hole”.
The speech was delivered in the Downing Street rose garden to around 50 members of the public, who Sir Keir met during the election campaign.
In an op-ed for The Times published yesterday, he said: “Under the Conservatives, the rose garden became a symbol of the rot at the heart of their government.”
He referenced Dominic Cummings’ infamous press conference during the early stages of the pandemic, along with the photographs taken of former Prime Minister Boris Johnson and his staff with bottles of wine and a cheese board during Covid restrictions.
Sir Keir also spoke of his apparent shock at the extent of the prisons crisis. He described being “in the Cobra room with a list of prison places across the country on a day-by-day basis, trying to work out how we deal with disorder”.
However, he also managed expectations about the speed with which the Government can deal with the crisis, saying: “I can’t build a prison by Saturday.”
In response, the Leader of the Opposition, Rishi Sunak, said that “[Sir] Keir Starmer’s speech today was the clearest indication of what Labour has been planning to do all along – raise your taxes.”
Sir Keir has also faced criticism from the left, with the General Secretary of Unite, Sharon Graham, saying that it was “time to see the change that Labour promised”.
She added: “We don’t need more excuses about fiscal responsibility or talk of wealth creation. We should not pit pensioners against workers – that is not a choice that should be on the table.”
During the election campaign, Labour ruled out any headline tax increases on “working people”, including to income tax, national insurance, and VAT.
Despite this, they were heavily attacked by the Conservatives on that issue, with claims that households would face £2,000 worth of tax rises.
The Labour Government has not ruled out changes to inheritance tax, capital gains tax, and tax relief on pensions, making each of them potential areas of focus for the October Budget.
Sir Keir’s speech was delivered ahead of Parliament’s return from recess on Monday next week.
