Prime minister Keir Starmer has warned the October Budget is going “to be painful” further fuelling rumours of incoming tax rises.
In a speech to mark Parliament’s return next Monday (September 2), Starmer stated it would not be “business as usual”.
He also claimed that now until December, his party would introduce legislation to boost economic growth and protect taxpayers but also pointed out he would need to make “big asks” of the public.
“I will be honest with you, there is a Budget coming in October and it's going to be painful.
"Just as when I responded to the riots, I'll have to turn to the country and make big asks of you as well to accept short term pain for long term good. The difficult trade-off for the genuine solution."
Starmer reiterated chancellor Rachel Reeve’s sentiments that the Labour party had inherited a “black hole” in public finances adding that “things will get worse before they get better”.
Last month (July 29), Reeves announced a Budget would be held on October 30 to "fix the foundations of the economy".
In his speech, Starmer said the government has been left with “no other choice, given the situation that we’re in".
“Those with the broadest shoulders should bear the heavier burden, and that’s why we’re cracking down on non-doms,” he added.
Starmer also highlighted that those “who made the mess should have to do their bit to clean it up”.
In terms of tax raises, Starmer confirmed income tax, VAT and national insurance would not be raised.
When asked by reporters which specific taxes could be in the spotlight, Starmer did not share any insight.
He said: “We have to get away from this idea that the only levers that can be pulled are more taxes, or more spending. Our number one mission is to grow the economy."
Starmer was also asked whether spending cuts were being considered to which he replied he would not “pre-empt the chancellor” in relation to the upcoming Budget.
The government also announced it would remove the winter fuel payment from those not in receipt of pension credit or other means tested benefits.
Starmer said today he did not want to make changes to the winter fuel allowance but also said he did not expect a £22bn black hole from the Tories.
The Conservatives responded to the prime minister’s speech on social media platform ‘X’.
They said: “Politics is about choices. Keir Starmer chose to take winter fuel support from pensioners. He chose to spend billions on inflation-busting union pay deals.
“He chose to give Labour donors unrestricted access to Downing Street. And it’ll be his choice to raise your taxes, too.”
alina.khan@ft.com
