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

Published

8 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

The crypto fund domicile decision: EU or the UK?

Published

20 mins ago

June 17, 2025

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The crypto fund domicile decision: EU or the UK?

As the EU’s MiCA regulation and the UK’s evolving crypto laws diverge, fund managers face a key choice: to opt for the EU’s legal certainty and passporting or the UK’s flexible, innovation-driven approach.

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Sir Keir Starmer hits out at politicians who ‘shout and scream but do nothing’ over grooming gangs

Published

20 mins ago

June 17, 2025

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Sir Keir Starmer hits out at politicians who 'shout and scream but do nothing' over grooming gangs

Sir Keir Starmer has said he gets “frustrated” with politicians who “shout and scream but do nothing” as he defended past comments about a grooming gangs inquiry.

Speaking to Sky News’s political editor Beth Rigby, the prime minister was asked if he regretted saying in January that those calling for a national probe into paedophile rings were “jumping on a far-right bandwagon” – given he has now agreed to one.

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Sir Keir said he was “really clear” he was talking about the Tories, who were demanding an inquiry they never set up when they were in government.

He said: “I was calling out those politicians.

“I am frustrated with politics when people shout and scream a lot and do nothing when they’ve got the opportunity to do it. It’s one of the worst aspects of politics, in my view.”

Sir Keir also said there “must be accountability” for authorities who “shied away” from talking about the ethnicity of perpetrators for fear of being branded racist, as exposed in a report by Baroness Casey published on Monday.

Asked if he is happy for “social workers, policemen and people that failed” to be held accountable, the prime minister said: “Where the inquiry uncovers failure or wrongdoing, then there should absolutely be accountability.

“That is amongst the purposes of an inquiry, and it’s a statutory inquiry… which will therefore mean there is power to compel evidence of witnesses because it’s important that it is comprehensive and important that it gets to every single issue. And as part of that process, there’s accountability for individuals who did wrong.”

Baroness Casey was asked to produce an audit of sexual abuse carried out by grooming gangs in England and Wales in January, when comments by tech billionaire Elon Musk brought the scandal back into the spotlight.

The government initially resisted calls from the Tories for a national inquiry into grooming gangs, saying they wanted to focus on implementing the recommendations of Professor Alexis Jay’s seven-year review into child abuse.

The review concluded in 2022 but the Conservatives did not implement its recommendations before they lost the election last July.

The government’s position has changed following Baroness Casey’s audit, which recommended an inquiry.

Her report found that ethnicity data is not recorded for two-thirds of grooming gang perpetrators.

However at a local level in three police forces – Greater Manchester, South Yorkshire and West Yorkshire – “there has been a disproportionality of group-based child sexual exploitation offending by men of Asian ethnicity”.

The cross bench peer said instead of looking into whether ethnicity or cultural factors played a part, authorities “avoided the topic altogether for fear of appearing racist”, and this warranted further investigation.