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Prime minister Sir Keir Starmer has warned that the upcoming autumn budget is “going to be painful”, indicating that the Labour government will raise taxes as it aims to to plug the £22bn black hole left by the Tories.
Speaking in the Rose Garden in 10 Downing Street this morning, his first major speech as prime minister, he warned that he would have to make “big asks” of the public.
“We have 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 said.
“In relation to working people, income tax, national insurance, VAT, we will not increase tax. “I say again what I said before the election, we have to get away from the idea that the only levers are more tax and more spending.”
However, the UK leader stressed that the government will focus on growing the economy, fixing the transport system and the NHS. “This is our country, let’s fix it together,” he said.
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Starmer added that economic growth and wealth creation was the “number one priority of this Labour government” amid planning reforms and the establishment of Great British Energy.
He also cited the public sector pay deals which have brought to an end to prolonged strike action.
“We have done more in seven weeks than the last government did in seven years,” he said.
The budget is set to be announced on Wednesday 30 October.
It came as chancellor Rachel Reeves said last month that the UK should expect tax rises in October. She told the News Agents podcast: “I think that we will have to increase taxes in the budget.”
She will receive the Office for Budget Responsibility’s (OBR) initial assessment of the state of the economy early next month.
Laura Trott, the shadow chief secretary to the Treasury, said: “The government are no longer promising to protect working people from their incoming tax raid because just like pensioners, working families are next in line for Labour’s tax hikes.
“After promising over 50 times in the election not to raise taxes on working people Labour are now rolling the pitch to break even more promises.
“The chancellor is entitled to raise taxes to pay for her expensive choices and above inflation pay rises demanded by her union paymasters, but she should have had the courage to be honest from the start. This a betrayal of people’s trust and we will hold them to account for their actions.”
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