October’s Budget will be “painful” and the government will have to make “big asks” of the public, Sir Keir Starmer has warned.
Speaking from the Downing Street garden, the prime minister said people would have to “accept short-term pain for long-term good”.
He did not set out the details of what would be in the Budget but said those with the “broadest shoulders should bear the heavier burden”.
The prime minister said he had inherited “not just an economic black hole but a societal black hole” from the previous Conservative government.
Conservative leader and ex-PM Rishi Sunak said the speech was “the clearest indication of what Labour has been planning to do all along – raise your taxes”.
Since coming to power in July, Labour has sought to emphasise the challenges it faces in government and blame Tory ministers for failing to address those problems prior to the election.
In his speech, Sir Keir claimed things were “worse than we ever imagined” and accused the Conservatives of creating a £22bn black hole in the public finances – something the Tories strongly deny.
He also said the previous government had “failed to be honest” adding: “They offered the snake oil of populism which led to more failure – round and round and round.”
He argued that people who took part in the recent riots “saw the cracks in our society after 14 years of failure and they exploited them”.
Looking to the future, Sir Keir said “tough action” would be needed to “fix the foundations of the country”.
He repeated his pledge, made during the election campaign, that the government would not raise National Insurance, income tax or VAT.
His Chancellor, Rachel Reeves, has made similar promises but said she thinks some taxes will rise and has not ruled out an increase in inheritance tax, capital gains tax, or reforming tax relief on pensions.
The government has already announced some cost-cutting measures including scrapping a planned cap on social care payments and withdrawing the winter fuel allowance from 10 million pensioners.
One Labour backbencher told the BBC their inbox has been full of people worried about the decision to end universal winter fuel payments for pensioners in particular – but that “people will understand” the thinking behind it after listening to Keir Starmer.
Some Conservatives have criticised the government’s decision to award pay rises to public sector workers while restricting access to the winter fuel allowance.
Defending the decision, Sir Keir said “simply allowing national strikes to go and on and not resolving them was costing the country a fortune”.
After the speech, Sir Keir was asked about Conservative accusations of “cronyism”.
The opposition has attacked the government for giving a No 10 pass to one Labour donor Lord Alli and appointing another donor, Ian Corfield, to a temporary job in the Treasury.
In response, Sir Keir said he wanted to “work at speed” and needed the “right people in the right places”.
He said he was determined to “restore honest and integrity” to government and added he would not “take lectures” from the Conservatives on this issue.
In an opinion piece for the Times published ahead of the speech, the PM wrote about how the very setting of his forthcoming speech, the Downing Street rose garden, may have become a “symbol of the rot at the heart of their government” for members of the public under prior Conservative leadership.
Sir Keir referenced the press conference given by Dominic Cummings, the former aide to Boris Johnson, where he defended his decision to break Covid lockdown rules.
He also wrote of the photographs taken near the rose garden of Mr Johnson and his staff with bottles of wine and a cheeseboard at a time of strict restrictions on social mixing during the Covid pandemic. Boris Johnson said at the time that the photos showed “people at work”.
The PM’s speech on Tuesday was in front of some 50 members of the public whom he met on the election campaign trail, including small business owners and public servants.
Reacting to details of the PM’s 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 fewer than 100 days, the Labour Party has dumped its ambition of public service and become engulfed in sleaze, handed out bumper payouts to its union paymasters with ‘no strings’ attached and laid the groundwork to harm pensioners and tax working people,” the Conservative Party chairman added.
The SNP’s Finance Secretary Shona Robison said: “While clearly the legacy of the Tory government, Labour must accept at least some of the culpability for the mess that the UK is now in.
“In opposition, they rowed in behind many of the Tory decisions that have damaged the economy and hurt living standards – whether that is Brexit, austerity spending cuts or attacks on the welfare state.”
Green Party co-leader Carla Denyer said “Enduring more economic pain and hardship isn’t what people voted for.
“Labour’s refusal to tax the super-rich shows that business as usual is very much still in business.”
Liberal Democrat leader Sir Ed Davey said the country needed “bold and ambitious action from the government” – particularly on health and social care.
“Only by getting people off NHS waiting lists can we get the economy growing strongly again,” he said.