Sir Keir Starmer will need to show progress on his missions amid the bleak picture he has painted
Cast your mind back to the heady days of early July, as a beaming Sir Keir Starmer swept into Downing Street to a cheering crowd and the promise of “change”.
Britain’s seventh ever Labour prime minister had won a landslide that deservedly drew parallels between himself and the party’s most successful election winner Tony Blair.
Yet on Tuesday, just over 50 days on from that moment, Sir Keir was very clear that the ballot box victory was where the parallel ends.
Politics live: Starmer offers biggest clue yet as to where possible tax rises may hit
Forget New Labour’s “things can only get better” mantra. In his first major Downing Street speech, this prime minister was clear that in his Britain “things can only get worse – for now”.
Armed with a new slogan across the lectern – “fixing the foundations” – Sir Keir set out the parlous state of the public finances, the dangerous populism that had flourished under the Tories and corroded our communities, triggering the recent riots, and the erosion of trust between government and the governed.
He reiterated his commitment to put government “back into the service of working people” and to repair “broken Britain”. But, he said, it would take time, be “painful” and involve unpopular decisions.
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In a nutshell, this was a prime minister preparing the ground for tax rises and spending cuts in the autumn – all those questions avoided during the general election, now answered up front from the vantage point of being in government with a massive majority.
The autumn budget was “going to be painful”, he told an audience of members of the public he had met during the election campaign.
“We have no other choice, given the situation we’re in,” he added. “Frankly, things will get worse before they get better.”
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PM: Budget will be ‘painful’
For all the talk of doing politics differently, Sir Keir was rolling out a well-worn political strategy – blame the previous government for the terrible state of the country in order to create some space to do unpopular things.
His calculation is that the public will blame the past government, not his, particularly if – as he highlighted in his speech – voters can see the new administration is getting on with its priorities around growing the economy, green energy, housebuilding, or cutting NHS waiting lists by striking public sector pay deals.
“Come the autumn, if we can show we are getting on with it, we hope it will buy us some time,” said one senior government figure. “What people will want is progress checks.”
But, as the controversy over the scrapping of the universal winter fuel allowance payments to pensioners shows, these difficult decisions will face a backlash.
The Starmer administration is already under fire from some on its own side to amend the policy and that noise is unlikely to dim as the increased energy price cap kicks in over the autumn and winter.
And what of tax rises? Sir Keir told me in our Sky News Leaders’ Debate he had “no plans” to raise taxes beyond what was outlined in the manifesto.
Now he says that what Labour characterise as a £22bn “black hole” in the public finances – caused in part by Labour’s decision to settle on public sector pay recommendations – leave him with few options.
But in reality, questions around tax rises and spending cuts, given the state of the public finances, were raised repeatedly in the election, and Labour avoided answering them.
Rishi Sunak is now already arguing that Labour are doing what he warned they would in the election – put up taxes.
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‘Hunt lied over state of public finances’
This will undoubtedly be the running battle of the autumn. On Tuesday, Sir Keir ruled out raising taxes on “working people”, in the shape of income tax, national insurance of VAT.
But he left no doubt in my mind tax rises were on the way as he signalled that “those with the broadest shoulders” should carry the burden, paving the way for more levies on the wealthy, and perhaps big business too.
Sir Keir might be successful politically in pinning the blame on the Tories. But he does not want to just have a political win. He wants to restore trust in politics.
For now, voters might be forgiven for thinking it is more of the same – the promise of change before the election only to then witness a blame game in which politicians trade blows and the public have to take the political pain after the win.
Things can only get worse is indeed, as Sharon Graham of Unite put it after Sir Keir’s speech, a “bleak picture” of Britain. But it is now the opening chapter of this Labour administration.
For a country running out of patience, Sir Keir will need to show some progress on his missions too. Labour won on a slogan of change, not more of the same.
UK
Budget 2025: Reeves urged to ‘make the case’ for income tax freeze – as PM hits out at defenders of ‘failed’ policy
Rachel Reeves needs to “make the case” to voters that extending the freeze on personal income thresholds was the “fairest” way to increase taxes, Baroness Harriet Harman has said.
Speaking to Sky News political editor Beth Rigby on the Electoral Dysfunction podcast, the Labour peer said the chancellor needed to explain that her decision would “protect people’s cost of living if they’re on low incomes”.
In her budget on Wednesday, Ms Reeves extended the freeze on income tax thresholds – introduced by the Conservatives in 2021 and due to expire in 2028 – by three years.
The move – described by critics as a “stealth tax” – is estimated to raise £8bn for the exchequer in 2029-2030 by dragging some 1.7 million people into a higher tax band as their pay goes up.
Rachel Reeves, pictured the day after delivering the budget. Pic: PA
The chancellor previously said she would not freeze thresholds as it would “hurt working people” – prompting accusations she has broken the trust of voters.
During the general election campaign, Labour promised not to increase VAT, national insurance or income tax rates.
Sir Keir Starmer has insisted there’s been no manifesto breach, but acknowledged people were being asked to “contribute” to protect public services.
He has also launched a staunch defence of the government’s decision to scrap the two-child benefit cap, with its estimated cost of around £3bn by the end of this parliament.
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Prime minister defends budget
‘A moral failure’
The prime minister condemned the Conservative policy as a “failed social experiment” and said those who defend it stand for “a moral failure and an economic disaster”.
“The record highs of child poverty in this country aren’t just numbers on a spreadsheet – they mean millions of children are going to bed hungry, falling behind at school, and growing up believing that a better future is out of reach despite their parents doing everything right,” he said.
The two-child limit restricts child tax credit and universal credit to the first two children in most households.
The government believes lifting the limit will pull 450,000 children out of poverty, which it argues will ultimately help reduce costs by preventing knock-on issues like dependency on welfare – and help people find jobs.
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Budget winners and losers
Speaking to Rigby, Baroness Harman said Ms Reeves now needed to convince “the woman on the doorstep” of why she’s raised taxes in the way that she has.
“I think Rachel really answered it very, very clearly when she said, ‘well, actually, we haven’t broken the manifesto because the manifesto was about rates’.
“And you remember there was a big kerfuffle before the budget about whether they would increase the rate of income tax or the rate of national insurance, and they backed off that because that would have been a breach of the manifesto.
“But she has had to increase the tax take, and she’s done it by increasing by freezing the thresholds, which she says she didn’t want to do. But she’s tried to do it with the fairest possible way, with counterbalancing support for people on low incomes.”
Read more:
Labour’s credibility might not be recoverable
Budget 2025 is a big risk for Labour’s election plans
She added: “And that is the argument that’s now got to be had with the public. The Labour members of parliament are happy about it. The markets essentially are happy about it. But she needs to make the case, and everybody in the government is going to need to make the case about it.
“This was a difficult thing to do, but it’s been done in the fairest possible way, and it’s for the good, because it will protect people’s cost of living if they’re on low incomes.”
The manager of an Edinburgh cocktail bar will speak to police today over the “catastrophic” theft of an eight-foot tall nutcracker figure from outside his venue.
In what can only be described as a total nightmare before Christmas, a person riding an e-bike guaranteed a place on the naughty list by stealing the Copper Blossom’s festive statue on Monday.
They are seen on CCTV placing the soldier across their lap and riding off into the night down George Street towards St Andrew Square.
The thief was wearing a dark hoodie
Speaking to The UK Tonight on Sky News, manager Paul Paxton said it was a massive financial blow for his bar.
“The individual nutcrackers are about £900 each,” he revealed.
The stolen one is named Nolan, while his “brother” Nelson remains “safe and sound”.
They were part of the Copper Blossom’s outdoor Christmas display, and Nelson has now been moved into the foyer.
Mr Paxton said he would be speaking to police about their investigation, with sightings having been reported “around Edinburgh” later on the night of the incident.
Nolan, who the owner described as “massive”, was taken at around 10.10pm. The CCTV footage shows the thief removing the statue and dragging it on to their bike.
You can see Nolan being taken away in this shot
As if losing a £900 nutcracker wasn’t bad enough, a table costing hundreds of pounds was also broken.
“It’s pretty catastrophic,” said Mr Paxton.
The bar had originally put out an appeal that said “if you return it, we’re all good” – but he admitted he doesn’t expect Nolan’s return any time soon.
Paul Paxton is dwarfed by his nutcracker soldiers
And while he’d “never want someone to go into harm’s way”, he told Jayne Secker he was a little disappointed no witnesses alerted him or his staff to the theft.
“There were about 12 or 13 people who walked past,” he said.
“Even if someone had run in, that could have helped. It wasn’t a quick process – he fell off his bike.
“A heads-up would have been lovely.”
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