BRITISH PRIME MINISTER Keir Starmer has told the UK that the public should expect a “painful” budget because the former Conservative Party Government spent and borrowed much more than what was expected and projected by the State accountants.
The Chair of the Office of Budget Responsibility (OBR) last month, in a letter to the UK Parliament’s Treasury Committee, said that he and his office were made aware of a £21.9 billion gap in public spending – done so by the former Cabinet.
Today, Starmer told the public that the Government has since learnt that the former Government had also borrowed £5 billion more than was expected by the State’s accountants “in the last three months alone”.
The Prime Minister’s address touched on what the public should expect from his Government in the coming months, as the Labour cabinet find ways to try and improve the finances of the country and the society.
In a campaign named ‘Fixing The Foundations’, Starmer addressed the scenes of rioting that was seen in recent weeks in the UK, the inflated spending receipts and the high borrowing bills, claiming that all were the cause of the former Tory Government.
Starmer said: “Before anyone says that this is performance or playing politics, let’s remember that the OBR did not know about [the overspend]. They wrote a letter setting that out. And they didn’t know because the last Government hit it.”
Watch LIVE: Keir Starmer’s speech on fixing the foundations of our country. https://t.co/xMOpZa1uPO
— Keir Starmer (@Keir_Starmer) August 27, 2024
In Richard Hughes’ letter, the Chair of the OBR said that the overspend represented “the one of the largest year-ahead overspends” against his office’s forecasts, outside of the years during the Covid-19 pandemic.
Hughes added, “given the seriousness of the issue”, that he would be launching a review into his office’s previous fiscal forecasts from March to determine whether or not the team were sufficiently prepared for such an event to take place.
The review will also assess the information that was provided to his office by the Treasury and the former Chancellor of the Exchequer Jeremy Hunt.
Starmer also blamed the increased borrowing on the “last Government’s recklessness” said that the former Cabinet had also “exploited” the “cracks in our society” which allowed for rioting to take place in the streets of the UK.
“That’s what we’ve inherited. Not just an economic black hole, a societal black hole. And that’s why we have to take action and do things differently,” he said.
“And part of that is being honest with people about the choices that we face. And, frankly, things will get worse before they get better.”
He added: “If we don’t take tough action across the board, we won’t be able to fix the foundations of the country as we need.”
Starmer outlined that the UK’s Budget for 2025 will be “painful” on citizens. But highlighted that those with the “broadest shoulders” will feel it most – insinuating that high earners will be faced with the largest tax raises.
The Prime Minister also promised a ‘crackdown’ on “non-doms”, or non-domicile citizens, who do not pay similar rates of tax, usually on a very large wealth, to others in the UK as they claim they are not a full-time resident of the UK.
Though Starmer did not go into detail of the coming budget, when pressed on tax raises he said: “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.”
Responding to the speech today, Former Prime Minister and outgoing leader of the Conservative Party Rishi Sunak said on X, formerly Twitter: “Keir Starmer’s speech today was the clearest indication of what Labour has been planning to do all along – raise your taxes.”
Conservative leadership candidate Kemi Badenoch, who serves as shadow housing secretary, said: “Keir Starmer is taking the British public for fools, but his dishonest analysis won’t wash. He campaigned on promises he couldn’t deliver and now he is being found out.”
Keir Starmer's speech today was the clearest indication of what Labour has been planning to do all along - raise your taxes.
— Rishi Sunak (@RishiSunak) August 27, 2024
Former minister Robert Jenrick, who is also a Tory leadership candidate, accused the Prime Minister of “shamelessly attempting to rewrite history” and having “laid the groundwork for huge tax rises”.
Starmer also faced criticism from the Green Party co-leader Carla Denyer, who claimed that the public did not vote to endure “more economic pain and hardship”.
“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,” she said.
Additional reporting by Press Association
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