Brits warned ahead of 'painful' budget as Keir Starmer says 'things are worse than we ever imagined'

Keir Starmer spoke about what to expect from the upcoming Budget announcement in a press conference in the Downing Street on Tuesday afternoon (August 27). The Labour leader revealed that “things are worse than we ever imagined” due to a £22 billion “black hole” in the public finances.

Starmer claimed that his government had found out last week that the previous Tory administration had borrowed £5bn more than budgeted by the Office for Budget Responsibility. He said: “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.

“Those with the broadest shoulders should bear the heavier burden, and that’s why we’re cracking down on non-doms. Those who made the mess should have to do their bit to clean it up – that’s why we’re strengthening the powers of the water regulator and backing tough fines on the water companies that let sewage flood our rivers, lakes and seas.

“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, the difficult trade-off for the genuine solution. And I know that, after all that you have been through, that is a really big ask and really difficult to hear. That is not the position we should be in. It’s not the position I want to be in, but we have to end the politics of the easy answer – that solves nothing.”

However, despite the warnings, the PM said that he was “not going to pre-empt the Budget” when push further on possible tax rises and spending decisions. Starmer said: “We were being honest about the situation before the election, we set out very clearly what we would be doing with tax rises.

“I made it clear on numerous occasions that national insurance, VAT and income tax would not go up, the triple lock for working people, and that remains the position. I also set out that our plans were fully funded and fully costed. What I did not expect was a £22 billion black hole.”

He added:  “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 to make sure we are creating the money in the first place – that remains the number one mission, nothing knocks that mission.

“And that’s why it’s really important we have a transport system that works, that’s why it’s really important we have an NHS capable of getting through the backlog, that’s why it’s important we have the national wealth fund, Great British Energy, that we unlock planning so that we can get on. All of those decisions are decisions we’ve taken in the first seven weeks to make sure we get the economy where we need it, but we’re going to have to take tough decisions.”

Outgoing Conservative Party leader Rishi Sunak commenting on the PM’s speech today, saying: “Keir Starmer’s speech today was the clearest indication of what Labour has been planning to do all along – raise your taxes.” Green Party co-leader Carla Denyer said: “Enduring more economic pain and hardship isn’t what people voted for. They were told they were voting for change, not voting for things to get worse before they get better. Labour needs to be honest about the fact that they could choose to make things better for everyone if they were bolder and braver.”