(qlmbusinessnews.com Wed. 28th Aug, 2024) London, UK —
Keir Starmer Warns of Painful October Budget: “Big Asks” Ahead
Sir Keir Starmer has cautioned that October's Budget will be “painful” and will require “significant sacrifices” from the public. Speaking from Downing Street, the Prime Minister emphasised that short-term hardships are necessary for the long-term benefit of the country. While he did not disclose specific details of the forthcoming Budget, he suggested that those with the “broadest shoulders” would be expected to contribute more.
Starmer criticised the previous Conservative government, accusing them of leaving both an “economic and societal black hole.” Former Prime Minister Rishi Sunak responded by claiming that Labour's plans to raise taxes had now been laid bare.
Since taking office in July, Labour has focused on highlighting the challenges they inherited and laying the blame on Tory ministers for the current state of the nation. Starmer stated that the situation was “worse than we ever imagined,” accusing the Conservatives of creating a £22 billion deficit in public finances—an accusation the Tories deny.
Starmer further criticised the previous government's “dishonesty,” accusing them of offering “the snake oil of populism” that only led to further failures. He connected the recent riots to societal cracks that emerged after 14 years of Conservative rule, suggesting that these were exploited by those involved.
Looking ahead, the Prime Minister underscored the need for “tough measures” to repair the country’s foundations. He reaffirmed his election pledge not to raise National Insurance, income tax, or VAT. However, Chancellor Rachel Reeves has hinted that some taxes could increase, without ruling out adjustments to inheritance tax, capital gains tax, or pension tax relief.
Labour has already introduced several cost-cutting measures, including scrapping a proposed cap on social care payments and withdrawing the winter fuel allowance from 10 million pensioners. Some Labour MPs have reported concerns from constituents about the end of universal winter fuel payments, but they believe that Starmer's reasoning will resonate with the public.
The government’s decision to award pay rises to public sector workers while restricting access to the winter fuel allowance has drawn criticism from some Conservatives. In defence, Starmer argued that allowing national strikes to continue unresolved would have been even more costly.
Following his speech, Starmer was questioned about allegations of “cronyism” from the Conservatives. The opposition has criticised Labour for granting a No 10 pass to donor Lord Alli and appointing another donor, Ian Corfield, to a temporary role in the Treasury. Starmer responded by stressing the need to “work swiftly” and ensure “the right people are in the right positions,” while asserting his commitment to restoring “honesty and integrity” in government.
In an opinion piece for The Times published ahead of his speech, Starmer highlighted how the Downing Street rose garden, the setting for his address, had become a “symbol of rot” during the previous Conservative leadership. He referenced Dominic Cummings' infamous press conference defending his breach of lockdown rules and the controversial photographs of Boris Johnson and his staff during the Covid pandemic.
The Prime Minister's speech was delivered to an audience of around 50 members of the public, including small business owners and public servants whom he met during the election campaign.
In response to the speech, Conservative Party chairman Richard Fuller dismissed it as “performative” and accused Labour of abandoning its public service ambitions in favour of “sleaze” and unnecessary payouts to unions. The SNP and Green Party also criticised the government, with the SNP's Shona Robison blaming Labour for supporting damaging Tory policies in opposition, and Green Party co-leader Carla Denyer criticising Labour's refusal to tax the super-rich. Liberal Democrat leader Sir Ed Davey called for “bold and ambitious action” from the government, particularly in health and social care, arguing that addressing NHS waiting lists is key to economic growth.
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