PM says Labour’s first budget will be painful
Chancellor Sir Keir Starmer has warned that October’s Budget will be “painful” and the Government will have to make “big demands” on the public.
Speaking in the Downing Street garden, the Prime Minister said people must “accept short-term pain for long-term gain”.
He did not provide details about what would be included in the budget proposal, but said “those with the broadest shoulders should bear the heavier burden.”
The Prime Minister said that from the previous Conservative government “we inherited not just an economic black hole but a social black hole”.
Conservative leader and former chancellor Rishi Sunak said the speech was “the clearest indication yet that Labour is doing what it has been planning all along – raising taxes”.
Since coming to power in July, Labour has highlighted the challenges facing its government and criticised Conservative ministers for failing to address them before the election.
In his speech, Sir Keir claimed the situation was “worse than we could have imagined” and accused the Conservatives of creating a £22bn surplus for the public budget – a claim the Conservatives strongly deny.
He also said previous governments “failed to be honest”, adding: “They offered a fake pill of populism that led again and again to further failure.”
He argued that those who took part in the recent riots “have noticed the cracks in our society after 14 years of failure and are exploiting them.”
Looking to the future, Prime Minister Sir Keir said “tough action” was needed to “repair the country’s foundations”.
He reiterated the promise made during the election campaign that the Government would not increase National Insurance contributions, income tax or VAT.
Finance Minister Rachel Reeves has made a similar promise, but believes some taxes would rise and has not ruled out raising inheritance tax, capital gains tax and reforming pension tax relief.
The government has already announced several cost-cutting measures, including removing the cap on social security payments and scrapping the winter fuel allowance for 10 million pensioners.
One Labour MP told the BBC that his inbox had been filled with emails from people concerned about the decision to end the universal winter fuel allowance, particularly for pensioners, but said that after hearing Keir Starmer’s speech “people will get the idea”.
Some in the Conservative Party have criticised the government’s decision to increase civil servant pay while restricting access to the winter fuel allowance.
Prime Minister Sir Keir defended the decision, saying: “Allowing nationwide strikes to continue unchecked and not resolved has cost the country enormous amounts of money.”
REUTERS/Temilade Adelaja
The Prime Minister will say that “coming together” to address the damage caused by the riots “shows us how to heal the rifts in our society”.
After the speech, Sir Keir was asked about the Conservative party’s accusations of “nepotism”.
Opposition parties have accused the government of giving Labour donor Lord Ally the position of chancellor and appointing another donor, Ian Caulfield, to a temporary position in the Treasury.
Sir Keir responded by saying he wanted to “work quickly” and that he needed to have “the right people in the right places”.
The Prime Minister expressed his determination to “restore honesty and integrity” to the Government, adding that he “will not be lectured” by the Conservatives on the issue.
In an opinion piece published in The Times ahead of the speech, the Prime Minister wrote that Downing Street’s Rose Garden, where the upcoming speech will be delivered, could have become a “symbol of corruption at the heart of government” to the public under the previous Conservative government.
Sir Keir was referring to a press conference given by Dominic Cummings, a former aide to former Prime Minister Boris Johnson, in which he defended his decision to break coronavirus lockdown rules.
He also wrote about a photo of the Prime Minister and staff holding bottles of wine and cheese boards near the rose garden at a time when the coronavirus pandemic was putting strict limits on social interaction – Johnson said at the time that the image showed “people at work”.
The prime minister spoke Tuesday to about 50 members of the public, including small business owners and civil servants he met during the election campaign.
Commenting on the details of the Prime Minister’s speech, Conservative Party chairman Richard Fuller said: “This is nothing more than a performative speech to distract the public from promises that Mr Starmer has no intention of keeping.”
“In less than 100 days, Labour has abandoned its civil service ambitions and descended into corruption, handing out huge salaries to union payroll workers ‘without strings attached’, damaging pensioners and laying the groundwork for a tax on working people,” the Conservative chairman added.
SNP Finance Minister Shauna Robison said: “While it is clearly a legacy of the Conservative government, Labour must accept at least some responsibility for the mess the UK is now in.”
“When they were in opposition they supported many of the Conservative decisions that damaged the economy and reduced living standards – whether that was Brexit, austerity spending cuts or attacks on the welfare state.”
“Enduring more economic pain and hardship is not what the American people wanted,” Green Party co-leader Carla Denier said.
“Labour’s refusal to tax the super-rich shows that business as usual is still prevalent.”
