LONDON: UK Prime Minister Keir Starmer warned Tuesday that his new government’s first budget in just over two months will be "painful”, asking the country to "accept short-term pain for long-term good”. Starmer, whose Labour Party won a landslide parliamentary majority on July 4, used his first major speech since then to lay the ground for the much-anticipated fiscal event on October 30.
He also used the address, from the Downing Street garden, to attack the ousted Conservatives, reiterating claims they had left a £22 billion ($29 billion) "black hole” in the public finances.
"There is a budget coming in October, and it’s going to be painful,” Starmer said. "Those with the broadest shoulders should bear the heavier burden,” he added, hinting at tax rises for some after Oct 30. Labour has pledged not to hike taxes on "working people”, which would appear to rule out raising income tax, other social security and VAT rates.
But there is growing speculation that other taxes, like capital gains, could be targeted. Starmer insisted the UK must look beyond tinkering with taxes and that growing the economy remained the "number one mission”. But he also cautioned that his government’s fiscal inheritance would not be "easily fixed”.
"We’re going to have to take tough decisions, I did not cater for a £22 billion black hole,” he added. Political opponents have argued that the government was aware of the country’s perilous financial plight months ago and is preparing the ground for unpopular announcements.
Labour has insisted the Tories misled the public and others on the issue, including the Office for Budget Responsibility (OBR). The independent fiscal watchdog has said it is investigating the last government’s spending forecasts in light of Labour’s black hole claims.
In his speech, Starmer also addressed the recent anti-immigration riots sparked by the deadly Southport knife attack. Officials have blamed far-right elements for helping to stir up the disorder, which targeted mosques and hotels housing asylum-seekers as well as police officers and other properties. Attempting to link the disturbances to the Conservatives’ legacy, the UK leader said they "didn’t happen in a vacuum” and had "exposed the state of our country”. They "revealed a deeply unhealthy society... weakened by a decade of division and decline, infected by a spiral of populism which fed off cycles of failure of the last government”. "Every time they faced a difficult problem, they failed to be honest, they offered the snake oil of populism, which led to more failure,” Starmer argued.
"We have inherited not just an economic black hole but a societal black hole and that is why we have to take action and do things differently. Part of that is being honest with people about the choices we face and how tough this will be,” he said. "Frankly, things will get worse before we get better,” he told the audience of apprentices, teachers, nurses, small business owners and firefighters.
The rose garden last made headlines after it was used by former Prime Minister Boris Johnson and his staff to hold parties during the COVID lockdowns, events that Starmer said had shattered the trust between the public and its politicians. Conservative leadership contender, Kemi Badenoch, who is also the party’s policy chief for housing and communities, said the speech was based on a "dishonest analysis”.
"The truth is that Keir Starmer is managing voters’ expectations for a decade of decline,” she said in a statement.
Finance minister Rachel Reeves has said the projected public finances overspend means having to cut billions of pounds of spending. "Those who made the mess should have to do their bit to clean it up,” Starmer said, referring to the water regulator’s new ability to place tough fines on companies responsible for allowing sewage into lakes and rivers. "But 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, difficult trade off, but the genuine solution.” — Agencies