Prime Minister Keir Starmer has issued a stark warning that the upcoming October budget will involve 'painful' decisions, as he blamed the previous Conservative government for a £22bn black hole in public finances. In his first major speech from Downing Street since taking office, Starmer said it would take years to repair the damage from what he called '14 years of rot'.
Speaking in the Downing Street garden, Starmer drew a contrast with the lockdown-breaking parties held there under Boris Johnson, but his message was one of fiscal gloom. He stated: 'There is a budget coming in October and it's going to be painful. We have no other choice, given the situation that we're in.' He added that those with the broadest shoulders should bear the heavier burden, citing plans to crack down on non-domiciled tax status.
Starmer and Chancellor Rachel Reeves have ruled out increases to income tax, national insurance, or VAT. However, they have not ruled out other tax rises, with Reeves reportedly considering increases to capital gains tax and inheritance tax. The prime minister defended the decision to means-test winter fuel payments, affecting about 10 million pensioners, calling it a necessary choice.
Starmer also highlighted the prisons crisis, saying he was shocked by the state of the prison system inherited from the Tories. He noted that during recent riots, he had to work out prison place availability on a day-by-day basis. He blamed the riots partly on the prisons crisis, arguing that offenders did not expect to be punished due to the system's failures.
The government faces pressure from Labour backbenchers to extend the £2bn household support fund beyond September. Starmer is hoping to avoid a voter backlash by attributing unpopular decisions to the previous government's legacy. The prime minister's speech has drawn criticism from some on the left, including Sharon Graham, but Starmer insists tough choices are unavoidable.
