Prime Minister Sir Keir Starmer signals tax rises coming as he warns of ‘painful’ budget
The October budget will be “painful”, Sir Keir Starmer has said, giving the biggest hint yet of tax rises.
Speaking from Downing Street, the prime minister said: “I will be honest with you, there is a budget coming in October and it’s going to be painful.”
He added: “Just as when I responded to the riots, I’ll have to turn to the country and make big asks of you to accept short-term pain for long-term good. The difficult trade-off for the genuine solution.”
Politics latest: Reaction as Starmer gives major speech
The budget is set to be held on 30 October.
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‘Things will get worse before they get better’
Sir Keir said “those with the broadest shoulders should bear the heavier burden” and “those who made the mess should have to do their bit to clean it up”.
The first group he linked to the scrapping of the non-dom tax status, and the latter to water companies paying fines.
The Conservatives have accused the prime minister of a “betrayal” of people’s trust after he promised not to raise taxes.
Tory leader and former prime minister Rishi Sunak posted on social media: “Keir Starmer’s speech today was the clearest indication of what Labour has been planning to do all along – raise your taxes.”
The prime minister referenced the “£22bn black hole” in the nation’s finances, that he said the Office for Budget Responsibility did not know about – as he took aim at the last government.
“I said change would not happen overnight,” Sir Keir said. “When there is a deep rot at the heart of a structure, you can’t just cover it up… you have to overhaul the entire thing, tackle it at root. Even if it’s hard work or takes more time.”
Read more:
Which taxes could Labour rise
Government borrowing highest since pandemic
Speaking about riots towards the end of July into the start of this month following the Southport stabbing attack which left three young girls dead – the prime minister hit out at a “minority of thugs that thought they could get away with causing chaos”.
Asked by Sky News political editor Beth Rigby which specific tax rises are being considered, Sir Keir reiterated that taxes on “working people” – like income tax, VAT and national insurance – will not go up.
He added: “We have to get away from this idea that the only levers that can be pulled are more taxes, or more spending.
“Our number one mission is to grow the economy.”
The prime minister was speaking from the rose garden at Downing Street – previously used by Boris Johnson’s adviser Dominic Cummings after he broke COVID lockdown rules, and also where gatherings took place during partygate.
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Dominic Cummings in the Downing Street rose garden in 2020. Pic: PA
This appeared to be a deliberate choice, as Sir Keir said: “This is a government for you, a garden and a building that were once used for lockdown parties.
“Remember the pictures? Just over there? With the wine and the food. Well, this garden and this building are now back in your service.”
Sir Keir has repeatedly blamed the previous government and said it is influencing his decision-making.
This includes the means testing of the winter fuel payments for pensioners.
‘Betrayal of people’s trust
The government’s claims of a £22bn “black hole” left by the Tories have been questioned following substantial pay awards to unions – including to both junior doctors and train drivers.
Sir Keir said he “didn’t want to means test the winter fuel payment”, but it was a choice that needed to be made to “protect the most vulnerable pensioners”.
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Laura Trott, the Conservatives’ shadow chief secretary to the Treasury, said: “The government are no longer promising to protect working people from their incoming tax raid because just like pensioners, working families are next in line for Labour’s tax hikes.
“After promising over 50 times in the election not to raise taxes on working people Labour are now rolling the pitch to break even more promises.
“The chancellor is entitled to raise taxes to pay for her expensive choices and above inflation pay rises demanded by her union paymasters, but she should have had the courage to be honest from the start.
“This a betrayal of people’s trust and we will hold them to account for their actions.”
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Politics
Starmer was aware of the risks of appointing the ‘Prince of Darkness’ as his man in Washington – to an extent
It was a prescient and – as it turned out – incredibly optimistic sign off from Peter Mandelson after eight years as Chancellor of Manchester Metropolitan University.
“I hope I survive in my next job for at least half that period”, the Financial Times reported him as saying – with a smile.
As something of a serial sackee from government posts, we know Sir Keir Starmer was, to an extent, aware of the risks of appointing the ‘Prince of Darkness’ as his man in Washington.
But in his first interview since he gave the ambassador his marching orders, the prime minister said if he had “known then what I know now” then he would not have given him the job.
For many Labour MPs, this will do little to answer questions about the slips in political judgement that led Downing Street down this disastrous alleyway.
Like the rest of the world, Sir Keir Starmer did know of Lord Mandelson’s friendship with the paedophile Jeffrey Epstein when he sent him to Washington.
The business secretary spelt out the reasoning for that over the weekend saying that the government judged it “worth the risk”.
Keir Starmer welcomes Nato Secretary General Mark Rutte to Downing Street.
Pic: PA
This is somewhat problematic.
As you now have a government which – after being elected on the promise to restore high standards – appears to be admitting that previous indiscretions can be overlooked if the cause is important enough.
Package that up with other scandals that have resulted in departures – Louise Haigh, Tulip Siddiq, Angela Rayner – and you start to get a stink that becomes hard to shift.
But more than that, the events of the last week again demonstrate an apparent lack of ability in government to see round corners and deal with crises before they start knocking lumps out of the Prime Minister.
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‘Had I known then, what I know now, I’d have never appointed him’ Starmer said.
Remember, for many the cardinal sin here was not necessarily the original appointment of Mandelson (while eyebrows were raised at the time, there was nowhere near the scale of outrage we’ve had in the last week with many career diplomats even agreeing the with logic of the choice) but the fact that Sir Keir walked into PMQs and gave the ambassador his full throated backing when it was becoming clear to many around Westminster that he simply wouldn’t be able to stay in post.
The explanation from Downing Street is essentially that a process was playing out, and you shouldn’t sack an ambassador based on a media enquiry alone.
But good process doesn’t always align with good politics.
Something this barrister-turned-politician may now be finding out the hard way.
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