Keir Starmer warns nation that Labour’s first Budget might be ‘painful’

Keir Starmer has warned the public Labour’s first Budget will be “painful” as he delivered a major speech on the state of the country.

Speaking from the No10 rose garden, the new PM claimed “things are worse than we ever imagined” after his Government highlighted a £22billion black hole in the public finances.

Hinting at possible tax rises for wealthier people in just a few weeks’ time, the PM 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,” he said.

“Those with the broadest shoulders should bear the heavier burden, and that’s why we’re cracking down on non-doms.”

In a frank message to voters, Mr Starmer said the country would have to “accept short term pain for long-term good, the difficult trade off for the genuine solution”.

He added: “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.”

But the PM made clear his election manifesto vow not to hike taxes on “working people” – including income tax and national insurance – will not be increased.

He said: “In the first few weeks we discovered a £22 billion black hole in the public finances and before anyone says ‘Oh this is just performative or playing politics’ let’s remember the OBR (Office for Budget Responsibility) did not know about it, they wrote a letter setting that out.

“They didn’t know because the last government hid it and even last Wednesday, just last Wednesday, we found out that thanks to the last government’s recklessness we borrowed almost £5 billion more than the OBR expected in the last three months alone. That’s not performative, that’s fact.”

It came as he defended already making “difficult decisions” such as scrapping winter fuel payments for millions of pensioners.
Last month the Chancellor Rachel Reeves announced support will now be means-tested – for those on pension credit and other benefits. Facing an intensifying backlash over the move, the PM said today: “I didn’t want to mean-test the winter fuel payment but it’s a choice we had to make.”

In his keynote speech in No10’s rose garden – where a “bring your own booze” lockdown party was held under Boris Johnson – the PM also vowed to clean up politics and “stop the rot” after 14 years of Tory rule.