Starmer confirms budget tax rises to prevent ‘devastating’ return to austerity

Published

4 months ago

October 28, 2024

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Sir Keir Starmer has confirmed there will be tax rises in the budget to prevent a “devastating return to austerity” and rebuild public services.

In a speech in Birmingham, the prime minister also announced the £2 bus fare cap will rise to £3, while £240m will be injected into efforts to get people back to work.

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It follows weeks of speculation on how the government plans to grow the economy and close a £40bn blackhole in the nation’s finances when it delivers its first fiscal statement on Wednesday.

Giving a teaser of what is to come, Sir Keir said: “It is time to embrace the harsh light of fiscal reality.

“Stability to prevent chaos. Borrowing will drive long term growth. Tax rises to prevent austerity and rebuild public services.”

Sir Keir did not specify what tax rises would be included, but it is widely expected that employer national insurance will go up, alongside possible increases to capital gains and inheritance tax.

Ministers have been facing repeated questions about the government’s definition of “working people”, after Labour’s election manifesto pledged not to increase taxes on working people – explicitly ruling out a rise in VAT, national insurance and income tax.

Facing down critics, the prime minister said a return to austerity would be “devastating” and “disastrous”.

“This is not 1997 when the economy was decent, but public services were on their knees.

“And it’s not 2010 where public services were strong, but the public finances were weak.

“We have to deal with both sides of that coin. These are unprecedented circumstances.”

Sir Keir said the budget, to be delivered by Chancellor Rachel Reeves, will include funding for local services to help get people back to work.

He said the UK is “the only G7 country for whom economic inactivity is still higher than it was before COVID”.

“That’s not just bad for our economy, it’s also bad for all those who are locked out of opportunity,” he said.

“So the chancellor will announce £240m in funding to provide local services that can help people back into work.”

Clearest indication yet that tax rises are coming

Liz Bates

Political correspondent

@wizbates

This may be the starkest terms we’ve ever heard the prime minister speak in as Wednesday’s defining budget looms.

He repeated the refrain of “tough choices” suggesting the pain inflicted by the cuts to the winter fuel allowance was just the beginning.

This is also the clearest expression ever that tax rises are coming, with Sir Keir Starmer describing them as necessary to prevent austerity.

What was also clear was his concept of “working people” – those who are just about getting by financially, and his determination to put them first.

It was resolute and determined, but as the budget approaches it does create a political risk, as those who don’t fit into that narrow category – business owners, pensioners, and others – are left wondering how hard they are going to be hit.

Taking questions afterwards, he confirmed reports that the £2 bus fare cap will go up by 50%.

He said the previous government only funded the current limit to the end of 2024 “and therefore that is the end of the funding in relation to a £2 capped fare”.

“I do know how much this matters, particularly in rural communities where there’s heavy reliance on buses,” he said.

“And that’s why I’m able to say to you this morning that in the budget we will announce there will be a £3 cap on bus fares to the end of 2025 because I know how important it is.”

Politics

People living near new pylons could get £250-a-year off their energy bills, minister says

Published

2 hours ago

March 10, 2025

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People living near new pylons could get £250-a-year off their energy bills, minister says

Residents who live near newly installed pylons will be compensated with £250-a-year off their energy bills, a minister has said.

Housing and planning minister Alex Norris told Sky’s Wilfred Frost on Breakfast that communities “need to share the benefits” of the government’s tilt towards clean energy.

“If you’re making that sacrifice of having some of the infrastructure in your community, you should get some of the money back,” he said.

“So we’re making that commitment – £250-a-year if you are near those pylons.

“We think that’s a fair balance between people who are making that commitment to the country… they should be rewarded for that.”

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Ministers are currently pushing through an overhaul of the planning system – long seen as a brake on housebuilding and vital infrastructure projects – to stimulate growth in the economy.

Overnight it was announced parts of the planning system could be stripped away as part of the government’s attempts to speed up house building.

In its election-winning manifesto, Labour promised to build 1.5 million new homes over the next five years to tackle the lack of affordable housing, with recent statistics showing that there are 123,000 households in temporary accommodation – including nearly 160,000 children.

Sir Keir Starmer has repeatedly vowed to put “builders not blockers first”, announcing at the beginning of the year “unarguable cases” that are legally challenged will only be able to be brought back to the courts once – rather than the current three times.

Councils have also been told to come up with “immediate, mandatory” housing targets to help the government achieve its target.

Under the reforms announced last night, consulting bodies such as Sport England, the Theatres Trust and the Garden History Society will no longer be required for those looking to build under the new plans being considered by ministers.

While consultees will not be completely removed from the process, it will no longer be mandatory for builders to receive the opinion of such bodies and their scope will be “narrowed to focus on heritage, safety and environmental protection”, according to the government.

It is hoped the slimming down of the process will reduce waiting times for projects.

Mr Norris said the interjections of official bodies in planning decisions was causing a “bottleneck” in granting applications.

“I think viewers might be surprised to hear that there are two dozen-plus organisations that have to be consulted on planning applications – that’s providing a bit of a bottleneck, often not getting back in time,” he said.

He said that while members of Sport England were “fine people”, there was a case where the body held up the development in Bradford next to a cricket pitch.

“The hold up is around a disagreement on the speed at which cricket balls are hit,” he explained.

“So Sport England are querying the modelling of the speed at which the balls will be hit, and that, as a result, has meant that the whole process is now multiple years down the line, and there’s no build out.”