“Things are worse than we ever imagined,” Keir Starmer warned the nation in a major speech in the Rose Garden at 10 Downing Street today.
The Prime Minister stressed that more than halfway through his first 100 days in office. The government faces further difficult decisions ahead of the October Budget. The stark message comes as the new Labour government faces widespread anger over its decision last month to scrap the universal winter grant for pensioners.
Starmer defended the move, saying he did not want to make the decision but it was one of the “tough measures” that were necessary given the £22 billion black hole in the government’s finances.
He also said he inherited a “social black hole” exposed by the recent riots. But he also sought to compare the public’s clean-up efforts after the riots to those of the new Government, which wants to “get the country in order”.
He said: “The people who came from all over the country the next morning with brooms, shovels and trowels and cleaned up our communities reminded us that we are real people. I was really proud of the people who cleaned the streets and rebuilt the walls and repaired the damage.
“And then I thought about the obvious parallels, because imagine the pride we will feel as a nation when the hard clean-up job is completed and we have the country that we built together. In the end, it belongs to each and every one of us and we all have a stake in it.
October Budget will be ‘painful’
In the clearest message of his speech in the Rose Garden at No 10, the Prime Minister warned the country that the 30 October Budget will be “painful”. He did not mention the measures announced by Chancellor of the Exchequer Rachel Reeves but suggested the wealthiest could be asked to pay higher taxes.
Struggling to overcome a £22bn black hole identified by the Government last month, he said: “Given the situation we find ourselves in, there is no other option. In a blunt message to voters, Starmer said the country must “bear short-term pain for long-term gains, difficult compromises for real solutions.”
He added: That is not the position we should be in. It is not the position I want to be in, but the politics of easy answers that solve nothing has to end. Income tax, VAT, Social Security etc. will not be increased and will remain as they are.
More ‘difficult compromises’ to end winter fuel payment
Last month the Chancellor announced he would end winter fuel payment for millions of pensioners, a move that sparked widespread anger. Instead, the support would be means-tested, but the backlash intensified after Ofgem announced last week that energy prices would rise in October.
Commenting on the “difficult decision” today, Starmer said: “We have taken this difficult decision to get our finances in order so that everyone, including pensioners, benefits in the long term.
This is a difficult compromise and there are many more to come. I will not hesitate to take unpopular decisions now if it is the right thing for the country in the long term. That is what a serving government is all about. ”
Shortly after the speech, Simon Francis, coordinator of the End Fuel Poverty Coalition, warned that abolishing the winter fuel payment “has the potential to create a public health emergency and will in fact put even more pressure on the beleaguered NHS that the Chancellor claims he wants to improve.”
Chancellor claims Conservatives have borrowed £5 billion more than expected
The Chancellor said he did not know until last week that the Conservatives had borrowed £5 billion more than expected.
He said the figure also surprised the regulator, the Office for Budget Responsibility (OBR). He claimed Rishi Sunak and others had “hidden” the dire state of the economy.
Starmer said: “In the first few weeks we discovered there was a £22bn black hole in our finances. And before anyone says, ‘Oh, it’s just show or political chatter’, let’s not forget that the OBR didn’t know about it.”
He continued: Because the previous Government kept it a secret. Just last Wednesday we discovered that, thanks to the previous Government’s recklessness, we have borrowed nearly £5 billion more in the last three months alone than the OBR had forecast. That’s not a pastiche, that’s a fact. “
The OBR said last week it expected borrowing to fall by £4.7 billion, but instead figures published last week showed that borrowing was £51.4 billion.
The Chancellor has had to check on a daily basis the situation in prisons during the summer riots
In his speech, the Chancellor said that dealing with the rioting and looting that shocked the country earlier this summer had been “much more difficult” than 2011. Starmer, who was justice secretary at the time, said today he had no doubt the courts could deal with the riots of more than a decade ago.
But speaking of the more recent riots, he said: “Literally every day during these riots we had to check the exact number of prisons and their locations to make sure we could arrest, charge and prosecute people quickly.”
Criticising the failures of the previous Conservative government, he continued, “Not having enough places in prisons is as fundamental a failure as it gets and the people who threw stones, set cars on fire and made threats knew that. Not only is the system broken, they were gaming it.
They thought, ‘Oh, they won’t arrest me, and if they do I won’t be charged, and if I do I won’t be particularly punished.'” “They realised there were cracks in our society after 14 years of failure and they exploited them. This is what we inherited. It’s not just an economic black hole, it’s a social black hole and we have to act and behave differently.”