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“We have inherited not just an economic black hole but a societal black hole, and that is why we have to take action and do things differently,” UK PM Keir Starmer said. In the upcoming budget in October, his government is likely to raise taxes and cut spending read more
 "UK scurrying to fill 'economic black hole', PM Starmer says ‘things will get worse before better'")
Britain's Prime Minister Keir Starmer has warned of short-term pain before long-term good for taxpayers. Reuters
Prime Minister Keir Starmer on Tuesday (August 27) signalled that his government would likely impose “painful” higher taxes on the wealthy as part of a broader plan to overhaul Britain’s economy and address what he described as deep-seated societal issues left by 14 years of Conservative rule.
Tackling the ’economic black hole’
Starmer, whose Labour Party secured a landslide victory in July’s general election, spoke of the need for tough decisions in his upcoming budget. Speaking in the Rose Garden of his Downing Street office, he warned that the country faces a difficult road ahead, with measures that may be unpopular but necessary for long-term recovery.
“We have inherited not just an economic black hole but a societal black hole, and that is why we have to take action and do things differently,” Starmer said. “Part of that is being honest with people about the choices we face and how tough this will be. Frankly, things will get worse before we get better.”
Addressing an audience that included apprentices, teachers, nurses, and small business owners, Starmer outlined his commitment to rebuilding trust in government and mending the fabric of British society, which he said had been torn apart by the Conservatives’ preference for populism over problem-solving.
Expectations from Rachel Reeves’ autumn budget
UK government borrowing reached £3.1 billion last month, more than double the amount from the same period last year.
Chancellor of the Exchequer Rachel Reeves is set to deliver the Autumn Budget on October 30. This will likely include tax increases, spending cuts, and stricter welfare policies to address the UK’s dire financial situation. Despite stronger-than-expected economic growth in the first half of 2024, Reeves has cautioned that a significant fiscal shortfall remains.
Reeves has ruled out increases in rates of income, corporation tax, and value-added tax, leaving limited scope for improving public services and boosting investment.
“We are committed to making the tough choices necessary to restore economic stability and build a fairer society,” Reeves had said last week, acknowledging the tough path ahead for the UK government as it grapples with the twin crises of economic and social instability.
With inputs from agencies
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English (US) ·