Prime Minister warns of "painful" October budget with finances "worse than we ever imagined"

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

In 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.

But he warned “things are worse than we ever imagined” because of a £22 billion “black hole” in the public finances, claiming to have found out last week that the Tories had borrowed almost £5 billion more than the Office for Budget Responsibility expected.

Sir Keir also claimed his Government has inherited a “societal black hole” made worse by recent rioting, and said his decisions to release some prisoners early and means-test the pensioners’ winter fuel allowance are “tough actions” needed to fix the country’s foundations.

He 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.

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

“Those who made the mess should have to do their bit to clean it up – that’s why we’re strengthening the powers of the water regulator and backing tough fines on the water companies that let sewage flood our rivers, lakes and seas.

“But, just as when I responded to the riots, I’ll have to turn to the country and make big asks of you as well, to accept short-term pain for long-term good, the difficult trade-off for the genuine solution.

“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.”

Political reaction to the speech

Ahead of the speech, Conservative Party chairman Richard Fuller said: “This is nothing but a performative speech to distract the public from the promises Starmer made that he never had any intention of keeping.

in response Sir Keir Starmer said “things are worse than we ever imagined”, telling a press conference: “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.”

LIb Dem leader Sir Ed Davey said “only the out-of-touch Conservative Party will deny the scale of the challenges” facing Sir Keir Starmer’s Government, in his reaction to the Prime Minister’s speech.

The Liberal Democrats’ leader said: “From the millions stuck on NHS waiting lists to the millions struggling to make ends meet, the last Conservative government has left a toxic legacy. We need bold and ambitious action from the Government to fix this mess.

“Liberal Democrats will work tirelessly to put our positive ideas forward and hold the new Government to account if they fail to rise to the challenges facing the country.

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