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PM Keir Starmer: here are the financial and social challenges facing the UK

In his first address to the nation, British Prime Minister Keir Starmer warned of the financial and social difficulties the UK will face. He stressed the need to make sacrifices to consolidate the foundations and build a solid future. The budget to be presented in October will be 'painful', but the PM pledged not to raise income tax or VAT

27 August 2024

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The summer is over and the autumn will be 'painful': in his first address to the nation today Premier Keir Starmer put optimism aside and warned that 'things will get worse before they get better'.

The situation with the public finances 'is much worse than we thought' and there is a £22 billion 'black hole' in the state accounts, said Starmer, leader of the Labour Party elected in July with an overwhelming majority.

The PM blamed the crisis on '14 years of mismanagement by the Tories', but in the name of transparency and honesty towards the voters he said he did not want to make illusory promises that there are easy solutions. There are no magic wands but rather 'sacrifices are needed today for lasting benefits tomorrow' - the party's new slogan is 'fixing the foundations', consolidating the foundations to build a solid structure for the future.

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A 'painful' budget

Although the new government has 'done more in seven weeks than the Tories have done in seven years', it must manage the legacy of the past and balance the books: for this, Starmer warned, the budget that the Chancellor of the Exchequer will present on 30 October will be 'painful'. The premier had pledged in the election campaign not to increase social security contributions, income tax or VAT and reiterated today that he will keep his promise.
A squeeze on other fronts is, however, inevitable in order to recover the funds needed to improve public services, health care in primis, which are at an end. "Those with the broadest shoulders will bear the heaviest burden," assured Starmer, perhaps hinting at taxes on extraordinary profits of large companies, capital gains or dividends of large shareholders. However, the premier did not want to give details, emphasising that it will be Rachel Reeves who will make the expected announcements on 30 October.

The black hole

The 'black hole' that Labour has inherited from the Tories is not only fiscal and financial but also social, Starmer said, as demonstrated by the August street clashes, when gangs of right-wing extremists and thugs attacked police and stormed reception centres and hostels for migrants in several British cities.
The Prime Minister, who before entering politics was Attorney General of the State and had handled the violent clashes in London in 2011, has used an iron fist against the extremists, arresting over a thousand people, hundreds of whom have been tried on summary judgement and already sentenced to long prison terms.

The August riots

The August clashes revealed the country's deep divisions and problems after 'years of populism', Starmer said, but they also showed the solution: the cohesion and sense of community displayed by people of different ethnicities and religions who took to the streets to clean up together after the clashes.

From parties to work

Speaking in the garden of Downing Street, the scene of illicit parties during the lockdown, Starmer said he wanted to 'show that we are now working here in the service of the people'. The partygate scandal had forced former premier Boris Johnson to resign, but it had also deeply eroded people's trust in politics. Therefore, Starmer said, his government's mission is to act with fairness and transparency to restore that trust. The Labour government intends to set up an ad-hoc commission shortly that will look into the fairness of procedures and watch over compliance with the rules, operating with total independence.

Great British Energy

When Parliament resumes work on Monday after the summer recess a series of new laws will be passed to deliver on campaign promises, Starmer said: reforms to speed up building permits and build more homes, new protections for workers, the re-nationalisation of the railways, and the creation of Great British Energy, a state body that will promote the 'green' energy transition.