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.”
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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.
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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.”
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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.”
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.
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.
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.”
Keir Starmer will sign a century-long partnership with Ukraine today, as the prime minister makes his first visit to the war-torn country in an effort to shore up support for Kyiv – just days ahead of the arrival of Donald Trump in the White House.
Sir Keir said the 100-year agreement underpinned Britain’s “steadfast support” for Ukraine as he reiterated European unity in the face of Russian aggression. The treaty and political declaration will be laid in parliament in the coming weeks.
“Putin’s ambition to wrench Ukraine away for its closest partners has been a monumental strategic failure. Instead, we are closer than ever and this partnership will take that friendship to the next level,” said the prime minister.
“The power of our long-term friendships cannot be underestimated. Supporting Ukraine to defend itself from Russia’s barbaric invasion and rebuild a prosperous, sovereign future, is vital to the government’s security and Plan for Change.”
The PM’s visit is part of a wider effort on the part of European leaders to shore up support for Kyiv as they ramp up discussions over regional security ahead of the handover of power in Washington. President Volodymyr Zelenskyy met with Prime Minister Donald Tusk of Poland on Wednesday.
The flurry of diplomatic activity comes as the conflict between Ukraine and Russia has intensified ahead of the inauguration of president-elect Trump, with Vladimir Putin trying to take as much territory as possible ahead of expected peace talks.
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On Wednesday, Ukraine’s state energy company was forced into emergency cuts after a massive Russian military attack.
Russia controls around a fifth of Ukraine after nearly three years of war and says any deal to end the conflict must take that into account.
In September 2022, it proclaimed four regions that it only partly controls as part of its own territory, which was condemned by the United Nations General Assembly (UNGA) as an “attempted illegal annexation”.
While President Joe Biden was steadfast in the US’s continuing support of Ukraine’s military effort, Trump has made it clear he wants to end the conflict quickly, hastening discussions about what a settlement might look like between Kyiv and Moscow.
In November, President Zelenskyy said for the first time in an interview with Sky News that Ukraine was prepared to temporarily cede territory to Russia to end the war if the conflict was frozen along current lines.
He added after a ceasefire was agreed, Kyiv could negotiate for the return of seized territory.
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Volodymyr Zelenskyy spoke to Sky’s Stuart Ramsay in Kyiv back in November about how a ceasefire could work.
Sir Keir has also changed his tone, from insisting allies must “double down” on support for Ukraine for “as long as it takes” at the November G20 summit, to saying British policy was now “to put Ukraine in the strongest possible position for negotiations”.
The prime minister will want to reiterate to President Zelenskyy that nothing is off the table, as the duo discuss the ongoing conflict, the impending Trump presidency and what a settlement could look like.
As part of the partnership deal, the UK will bolster military collaboration on maritime security through a new framework to strengthen the Baltic, Black and Azov seas.
President Zelenskyy has reportedly told journalists the two leaders will discuss the possibility of British troops joining a post-war peacekeeping force, as other European leaders such as French President Emmanuel Macron – who visited the PM at his Chequers country residence last week – and Tusk have similar conversations.
Ukraine relies on US support to continue the conflict, given it provides the bulk of military aid. But Trump has made it clear he is reluctant to keep funding the war, saying during the election campaign he would end it “within 24 hours” of taking office.
He has subsequently acknowledged that ending the conflict will be more difficult, but his administration is keen to press ahead: Trump has said he will arrange a call with Putin soon after his inauguration on 20 January, while the new US envoy to Ukraine, retired lieutenant General Keith Kellogg, said last week he wanted a solution to the war in the first 100 days of office.
The discussion around peacekeeping forces is part of a wider conversation among European allies about what security guarantees should be put in place for Ukraine, including buffer zones and the threat of more weapons for Ukraine in the absence of NATO membership.
President Zelenskyy has said any guarantees must be backed up by the US as the prospect of a NATO membership invitation fades from view.
Ukraine becoming a member of NATO is a clear red line for Moscow, with Putin describing Kyiv joining the security alliance as “an unacceptable threat”.
Last week, Trump acknowledged Moscow’s longstanding opposition to Ukraine’s ambition to join NATO, given it would mean “Russia has somebody right on their doorstep, and I can understand their feeling about that”.
European leaders are concerned Trump will force Ukraine into an unjust peace deal, and they will be shut out of the negotiations which will shape the security of the continent for many years.
NATO chief Mark Rutte last month cautioned Trump over his plans for a peace deal, warning it would lead to the West’s enemies “high fiving” and would only serve to embolden China, North Korea and Iran.
The PM has come under criticism from Conservative rivals for not visiting Ukraine sooner, with former defence secretary Grant Shapps saying he was “astonished” is has taken the PM six months in power to visit the country.
However, Sir Keir has met the Ukrainian leader six times, as well as hosting him twice at Number 10 since taking office in July.
The securities regulator wants an appeals court to rule that XRP tokens sold to retail investors were unregistered securities, the latest in its years-long case against Ripple Labs.