The 4 reasons why Keir Starmer thinks Britain needs a 'painful' Budget

Sir Keir Starmer warned that the UK Government’s forthcoming Budget will be “painful” as he asked the country to “accept short-term pain for long-term good”.

Delivering a speech in the Downing Street Rose Garden, the Prime Minister claimed his Government has done more in seven weeks than the Conservative government did in seven years.

However, he also warned things are “worse than we ever imagined”, in an address that focused on the tough decisions ahead, rather than reasons for optimism.

With the Chancellor Rachel Reeves set to deliver the Budget on 30 October, here are four reasons why the Prime Minister said it will have to be “painful”.

The public finances

Far and away the biggest reason for pessimism is the state of the public purse, with Sir Keir repeatedly citing the £22 billion “black hole” that Labour claims to have only found out about last week.

This follows the allegation, broadly backed by the Institute for Fiscal Studies, that the Tories borrowed almost £5 billion more than the Office for Budget Responsibility expected.

His language appears to hint at cuts, even if the Prime Minister point blank refused to elaborate on measures that may or may not be in the Budget.

Cuts

The Prime Minister’s hesitance to elaborate on what might be in the Budget was revealing, with the few things he would commit to being particularly telling.

Sir Keir insisted national insurance, VAT and income tax would not go up, and neither would “the triple lock for working people”. With no immediate changes on tax, the only possible conclusions to draw are new taxes on the wealthy, and cuts to public services.

This was made especially clear by his assertion that “those with the broadest shoulders should bear the heavier burden”, a comment that was referencing non-doms, but is likely to have further implications in the Budget.

Pay-rises

The Prime Minister also sought to defend the above-inflation pay rise for millions of public sector workers, which ended more than a decade of austerity in the sector.

Economists believe the move could cost up to £10 billion, and the Government has been criticised for delivering the rise while also cutting the winter fuel allowance.

Sir Keir argues this is part of getting the country back on track, ensuring there are staff to keep the transport system working, or doctors to deal with the NHS backlog.

But the Prime Minister made very clear this will be a trade-off, and not everything will be able to be fixed immediately.

This tracks with what Labour MPs have been saying privately for some time, that they expect the first term to be a clean up job, and only in a second term will people really start to feel the change required.

Prisons

The Prime Minister was also defensive over prisons, claiming the UK Government had to undertake daily checks on the number of prison places to “make sure we could arrest, charge and prosecute people quickly” during the recent riots.

He added: “No prime minister should ever be in that position when trying to deal with disorder. That’s what we inherited, that’s what we will fix.”

Saying it was impossible to build a new prison “by Saturday”, the Labour leader was making it clear that the prisons situation represented the wider issue.

There are too many long-term problems to fix, and some areas will have to be prioritised.