Closing summary
In his first major speech as prime minister, Keir Starmer gave his strongest hint yet of tax rises to come in October’s budget, warning he will have to make “painful” decisions after finding what Labour says is a £22bn black hole in the public finances left by the Tories.
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”.
Starmer said those with the “broadest shoulders” will carry the heaviest burden. He stressed that taxes on “working people” – namely national insurance, VAT and income tax – will not be increased in the 30 October budget, but stressed that “things will get worse before they get better”.
Starmer said removing winter fuel payments for millions of pensioners in England and Wales was difficult. There will be more “difficult” decisions to come, he said.
Starmer refused to comment on why he had chosen to overturn the appointment of Gwyn Jenkins, formerly the number two in the armed forces, as the new national security adviser, a decision that has caused unrest in Whitehall.
Former prime minister and current leader of the opposition, Rishi Sunak, said Starmer’s speech was “the clearest indication of what Labour has been planning to do all along - raise your taxes”. The shadow home secretary, James Cleverly, accused Starmer of having “waged war on pensioners”.
Sharon Graham, the general secretary of the Unite union, criticised the “bleak vision” Keir Starmer delivered in his first major speech as prime minister, saying it’s “time to see the change that Labour promised”. If we taxed 1% on the wealthiest 1%, the so-called black hole would be gone,” she wrote on X.
The Green party said “enduring more economic pain and hardship isn’t what people voted for”, with its co-leader, Carla Denyer, criticising Labour’s “refusal to tax the super-rich”.
The Scottish government is largely responsible for its current financial crisis, the country’s independence fiscal watchdog said, because it is spending so much on wages without a clear strategy on pay. SNP ministers are considering cutting or limiting universal benefits on which its electoral successes were built, including free prescriptions, free bus travel and free school meals, in a concerted drive to cut public spending.
Former British prime minister Liz Truss considered scrapping all cancer treatment on the NHS in an attempt to repair the damage caused by her economic policies, according to claims contained within Sir Anthony Seldon’s book, Truss at 10: How Not to Be a Prime Minister.
Thank you for reading and all your comments today. This blog is closing now but you can read all of our politics coverage here.
Updated
The deputy prime minister, Angela Rayner, who is also the housing secretary, has visited the scene of the aftermath of the tower block fire in Dagenham, east London, which broke out in the early hours of Monday morning.
Emergency services were called to the fire on Freshwater Road in east London at 2.44am on Monday, and a major incident was declared.
More than 100 people were evacuated from the eight-storey building and two were taken to hospital.
By about 12.30pm the London Fire Brigade said the fire was under control and the major incident had been stood down.
Speaking outside the burned building, Rayner told the PA news agency:
It’s horrific to see the level of damage that’s happened to the building, but it was also heroic to see the way the community and the first responders, the council, and all of the emergency services came together to prioritise, first of all, making sure that everyone got out of the building safely, but then also about bringing the fire under control.
You can see the level of damage that’s happened to the building, and I’m incredibly grateful for those that responded and managed to make sure that everybody was out of that building safely.
Updated
Labour has 'waged war on pensioners', shadow home secretary says
The shadow home secretary, James Cleverly, has accused Keir Starmer of “rolling out dishonest policies”, following his Downing Street speech earlier this morning.
Cleverly, who is running to replace Rishi Sunak as the leader of the Conservative party, said:
More meaningless drivel from Keir Starmer today as he tries to distract from his latest cronyism row. He says he wants to serve people; all he is serving them are tax rises.
The Conservatives left Labour with low inflation, falling migration, and the highest growth in the G7. Yet the Labour government have waged war on pensioners, caved to their union paymasters and splurged millions of pounds of taxpayers’ money on unaffordable pay rises for strikers.
Keir Starmer was elected on a manifesto that he won’t stick to, and he is now rolling out a series of dishonest policies for which he has no democratic mandate.
Since Labour’s landslide general election victory on 4 July, Labour have been at pains to blame the previous Conservative government(s) for leaving them with a terrible inheritance and no room for financial manoeuvre.
Labour has come under fierce criticism – including from its own MPs – about the decision to scrap winter fuel payments for 10 million pensioners in England and Wales.
Updated
Shona Robison, the Scottish finance secretary, said she welcomed the Scottish Fiscal Commission report into the devolved government’s spending crisis, but insisted it was largely due to cuts being imposed by the UK government.
She said:
I welcome this report, which provides useful independent analysis. As it says, there is ‘significant uncertainty’ on the level of funding we will receive from the UK government ahead of the UK Budget on 30 October.
The first minister and I have both made clear that, following the UK chancellor’s July statement, the Scottish government continues to face the most challenging financial situation since devolution.
I will be providing an update to [the Scottish] parliament after recess on the urgent action being taken to address these profound financial pressures.
Updated
Scottish finance watchdog says SNP ministers to blame for spending crisis
Severin Carrell is the Guardian’s Scotland editor
The Scottish government is largely responsible for its current financial crisis, the country’s independence fiscal watchdog has said, because it is spending so much on wages without a clear strategy on pay.
The Scottish Fiscal Commission said the emergency spending controls on all non-essential spending recently imposed by Shona Robison, the finance secretary, “are the result” of the pay policies pursued by Robison and other ministers.
The commission’s blunt assessment came as details emerged about the areas being considered for cuts, which already include reintroducing peak rail fares; cutting free iPads and laptops for school pupils; cutting back council spending on flood defences and nature restoration and cutting eligibility for free school meals.
Government departments have been told to freeze recruitment, ban all non-urgent staff travel, sacking outside consultants and public relations firms. The health and social care directorate, for instance, has been told to cut £750m from its spending immediately.
The commission said the devolved government estimates that last year public sector pay accounted for £25bn worth of its spending, equal to more than 50% of all the money it has for day to day spending.
Despite that, it had no policy on pay but had agreed this year to a host of pay awards (including to nurses, refuse workers and college staff) with an average increase of 6.5%, three percentage points higher than ministers estimated in May 2023.
“If a budget is set based on pay assumptions which are lower than those that materialise, this creates challenges with in-year management of the budget, requiring the government to reduce its planned spending on services.
“The recent emergency spending controls the Scottish government has put in place for 2024-25 are the result of those challenges,” it said.
Meanwhile Anas Sarwar, the Scottish Labour leader, said this situation was the result of 17 years of Scottish National party incompetence in government. “Every single institution is weaker, not stronger,” he said.
Michael Marra, Labour’s finance spokesman, said Robison and her colleagues were “in a blind panic” about their cost challenges. They had “no planning, no strategy for change,” he said.
Updated
Keir Starmer is coming under increasing pressure to extend key financial support programmes after the government’s decision to end winter fuel payments for millions of pensioners. The prime minister said in his speech this morning that this decision was a “difficult” one but stuck by it as he claimed it was necessary to get the public finances back in order after years of Conservative “rot” and economic mismanagement. Labour has also come under fire for its refusal to end the two-child benefit cap – which the Guardian has reported is unlikely to be lifted on the 30 October budget.
Reeves announced last month that only people eligible for pension credit ( or other means-tested benefits) would get the winter fuel payments, worth between £100 and £300, bringing them to an end for about 10 million pensioners.
You can read this useful explainer by the Guardian’s money and consumer editor, Hilary Osborne, on what exactly the winter fuel payments are and who is eligible for them here:
Updated
Members of the armed forces and government departments, manufacturers and academics have been asked to assess the strategic threat to the UK up to 2050 as part of the government’s root-and-branch review of defence policy.
George Robertson, a former Nato secretary general and defence secretary in Tony Blair’s first government, has written to dozens of interested parties with a 24-page questionnaire on the future of Britain’s defence.
Keir Starmer commissioned Lord Robertson to come up with a roadmap that equips the UK to “tackle international threats head on” and keep the country safe at a time when leaders across Europe recognise the need to increase defence spending to be combat-ready in the face of the continuing threat from Russia.
Robertson is drawing on expertise to work out how to direct Britain’s capability and funding.
“The UK faces threats that are growing and diversifying – war in Europe, conflict in the Middle East, states across the world that are increasingly acting in ways that challenge regional and global stability as well as our values and interests, terrorist groups, hybrid attacks and instability caused by climate change,” he wrote in his letter to respondents, seen by the Guardian.
His independent review is expected to be published in the first half of 2025, and will feed into the Ministry of Defence’s (MoD) strategy.
You can read the full story by my colleague, Lisa O’Carroll, here:
Liz Truss considered scrapping all NHS cancer treatment after disastrous mini-budget, book claims
Former British prime minister Liz Truss considered scrapping all cancer treatment on the NHS in an attempt to repair the damage caused by her economic policies, according to claims contained within Sir Anthony Seldon’s book, Truss at 10: How Not to Be a Prime Minister. Seldon is arguably Britain’s leading contemporary political historian. The Independent has this report on the extraordinary claim (we have not been able to independently verify it yet).
Sir Anthony’s book, Truss at 10: How Not to Be a Prime Minister, is deeply critical of Ms Truss, who was forced to resign in 2022 after she triggered an economic crisis by proposing the introduction of £45bn of unfunded tax cuts. She spent only 49 days in office.
The author claims that, in the immediate aftermath of the mini-Budget, Ms Truss and her chancellor, Kwasi Kwarteng, launched a desperate attempt to find spending cuts in an effort to restore stock market confidence in their strategy.
Sir Anthony says a group of Ms Truss’s Tory aides met to discuss the issue. One of her senior advisers, Alex Boyd “was told that Truss and Kwarteng were thinking they could still sort out the black hole with severe cuts”: “We’ve been told that they’re looking at stopping cancer treatment on the NHS.”
Mr Boyd’s response was to ask “Is she being serious?” writes Sir Anthony, while other aides said she had “lost the plot”.
“She’s shouting at everyone that ‘We’ve got to find the money.’ When we tell her it can’t be done, she shouts back: ‘It’s not true. The money is there. You go and find it,’” they told the author.
Speaking to The Independent, Mr Kwarteng said: “I wasn’t involved in any conversations about restricting healthcare, but that doesn’t mean the prime minister and her team didn’t discuss this.”
Updated
The crown prince of Bahrain, Salman bin Hamad Al Khalifa, and the UK’s prime minister, Keir Starmer, have greeted each other in front of No10 before stepping inside.
“Obviously, there’s a long, very important history between our countries which we’re very proud of and very keen to build on,” Starmer said.
The crown prince replied:
Thank you for taking the time to see myself and my delegation. I would like to congratulate you on your speech today, laying out a very ambitious roadmap for the future.
The Sunni Muslim-ruled state of Bahrain is a close ally of the UK.
Since pro-democracy protests against the ruling Al Khalifa family swept Bahrain in 2011, many people linked with demonstrations have been incarcerated. The government has launched sweeping crackdowns on activists, press freedom, civil society, opposition political groups, and has sought to silence online criticism.
The director of the Institute for Fiscal Studies (IFS), Paul Johnson, has said the government has given itself “deep problems” by ruling out so many possible tax rises in the upcoming autumn budget (Labour has repeatedly ruled out raising VAT, national insurance and income tax on “working people”).
Johnson said direct taxes on people with average wages are “the lowest they’ve been in fifty years”(you can read more on the IFS’ analysis that average earners are facing lower levels of direct taxation here).
“Trying to significantly increase taxes without impacting that group of people will be very complex and potentially have some negative economic consequences,” he said, adding that Rachel Reeves, the chancellor, is left with “difficult and complex choices” ahead of her 30 October budget.
As my colleague Kiran Stacey reports in this story, Reeves has been looking at a number of ways to raise money at her first major fiscal event, including raising capital gains tax and inheritance tax. She is also thought to be planning to stick to the tight departmental budget constraints forecast under the last government’s spending plans, and changing the way debt is measured to exclude the Bank of England.
More than half a million applications for help have been made as part of a Scottish scheme that aims to help less well-off families with the costs of raising their children, PA Media reports.
Figures published by Social Security Scotland showed since the Best Start grant and Best Start food schemes were set up, a total of £164.4m has been paid out. That comes after a total of 503,630 applications for help were received.
The figures were published ahead of the fifth anniversary of the introduction of two of the four payments included in the Best Start package of grants.
The Best Start grant school age payment provides families on certain benefits with a one-off payment of £314.45 being made to help with the costs of a child starting primary school. Since being established in 2019, it has provided £33.5m to more than 100,000 parents and carers.
Meanwhile, the Best Start foods payment is worth up £42.40 every four weeks to eligible families, with the money going to help them with the costs of buying healthy food. Overall, the scheme has given 86,000 parents and carers across Scotland assistance worth £57.1m.
To mark the fifth anniversary of these payments, social justice secretary Shirley-Anne Somerville urged Scots to check and see if they could be eligible for help.
She said: “Eradicating child poverty is the most important priority for our government and we are committed to making sure every child in Scotland has the best start in life.
“We have built a different social security system, one grounded in dignity, fairness and respect. Part of this is making it as straightforward as possible for people to access the financial support that people are entitled to.”
PA Media is reporting that Crown Prince of Bahrain Salman bin Hamad Al Khalifa has arrived in Downing Street.
Three Range Rovers are stationed outside Number 10 while the bilateral meeting takes place.
The Crown Prince and prime minister Keir Starmer are set to discuss heightened tensions and conflict in the Middle East, and trade and investment.
The End Fuel Poverty Coalition warns of potential 'public health emergency' this winter
As we reported in an earlier post, Rachel Reeves, the chancellor, is set to extend the household support fund, which is due to end next month and helps tens of thousands of households at risk of destitution with cash, food parcels, fuel vouchers and clothing.
The End Fuel Poverty Coalition, a group of anti-poverty campaigners, charities, local authorities and unions, said this is the “least” Labour needs to announce. The campaign group says the Treasury also needs to expand the warm home discounts, restore winter fuel payments and “evolve” standing charges, the daily fees that are applied whether you use any electricity or not.
Continuing the Household Support Fund is the least @Keir_Starmer needs to announce. We also need to see @hmtreasury support:
— End Fuel Poverty Coalition (@EndFuelPoverty) August 27, 2024
- Ending energy debt
- Expanding Warm Home Discounts
- Evolving standing charges
- Restoring Winter Fuel Payments to more peoplehttps://t.co/p7V7XGRmef
Reacting to Starmer’s speech, Simon Francis, coordinator of the End Fuel Poverty Coalition, said:
The winter fuel payment axe is not about rot in the system, it is about basic fairness for older people facing soaring energy bills.
In real terms, the changes this winter mean that some older people will face the highest energy bills on record.
This has the potential to create a public health emergency which will actually create more pressure on the under-pressure NHS which the prime minister says he wants to fix.
The impact of living in cold damp homes is particularly harsh on those older people with a disability, a long term health condition or with poor mental health. It results in people turning to an NHS and, in some cases, can result in additional winter deaths.
Ending energy debt, extending the Household Support Fund, expanding Warm Home Discounts and evolving standing charges are all now needed urgently to help mitigate the impact of high bills and the axe to the Winter Fuel Payment.
But as well as support this winter, the public need to see a clear timetable for when the very real benefits of cheaper renewable energy and the Warm Homes Plan will kick in.
If the prime minister needs to find some ‘broad shoulders’ to pay for this support, let’s not forget that every month we hear about more massive profits for firms in the wider energy industry.
Updated
Sunak: Starmer's speech is clearest indication of Labour's plan to raise taxes
Rishi Sunak, the leader of the opposition, has responded to Keir Starmer’s speech this morning from Downing Street’s rose garden.
In a post on X, the former prime minister wrote:
Keir Starmer’s speech today was the clearest indication of what Labour has been planning to do all along - raise your taxes.
Keir Starmer's speech today was the clearest indication of what Labour has been planning to do all along - raise your taxes.
— Rishi Sunak (@RishiSunak) August 27, 2024
During the general election, Sunak repeatedly said during ITV’s head-to-head debate with Starmer that “independent Treasury officials” had costed Labour’s policies “and they amount to a £2,000 tax rise for everyone”. Starmer said this claim was a lie.
Amid dire polling numbers, the Conservatives said they would rule out changes to council tax bands and cutting discounts, would maintain protections on homes from capital gains tax, and would not increase stamp duty. Labour said it would match all those pledges. Starmer insisted today that he would not raise tax on “working people” (while not clarifying what this actually means), namely national insurance, VAT and income tax.
During his speech this morning, Starmer, who won July’s general election in a landslide, 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.
SNP will lose Scottish election without complete rethink, say senior party figures
Libby Brooks is the Guardian’s Scotland correspondent, based in Glasgow
The Scottish National party will lose the next Holyrood election without a fundamental rethink of purpose and policy while carrying out long-delayed internal reforms, senior figures have warned.
However, some have expressed doubt that the party’s leader, John Swinney, is strong enough to direct the scale of change required.
Before the SNP’s annual conference at the end of August, the Guardian spoke to more than 20 influential voices within the party, including current and former Scottish government ministers, senior activists and those ousted in July’s catastrophic general election defeat – in which the SNP was reduced from 46 to nine MPs as Labour swept the board across the country.
Many predict the SNP, which has enjoyed stratospheric electoral success over the past decade, faces “a doing” at the Scottish parliament elections in 2026 as Scottish Labour capitalises on the UK party’s Westminster win.
“The way things are now, we run the real risk of not winning in 2026,” said one senior MSP. “We have to change course and John needs to be decisive.”
Stewart McDonald, a former MP for Glasgow South, who had cleared his Westminster desk before 4 July because he was so certain of defeat, said: “What does an SNP that has learned its lesson look and sound like? I don’t think it’s possible to overstate the scale of the challenge we are facing as a party.”
Almost all argued that countering the Labour message of change to voters who were desperate to get the Tories out of Downing Street was “incredibly difficult if not impossible”, as one former MP described it.
Starmer's speech shows he is 'taking the British public for fools', Kemi Badenoch says
Shadow housing secretary, Kemi Badenoch, who is the current frontrunner to be the next leader of the Tory party, said Starmer’s speech shows he is “taking the British public for fools”.
In one of the first reactions from a senior Conservative MP, Badenoch was quoted by the BBC as saying: “Keir Starmer is taking the British public for fools, but his dishonest analysis won’t wash.”
“He campaigned on promises he couldn’t deliver and now he is being found out,” she adds.
Badenoch has long been considered the frontrunner in the Tory leadership contest (as per this recent YouGov poll). She has said the Conservatives “will speak the truth again” and return to its roots if she wins it. The MP for north west Essex has argued for leaving the European convention on human rights, a major dividing line within her party.
Kemi Badenoch is the frontrunner in our new poll of Tory members for the 2024 leadership contest
— YouGov (@YouGov) August 23, 2024
% saying is their preferred candidate…
Kemi Badenoch: 24%
Tom Tugendhat: 16%
James Cleverly: 14%
Robert Jenrick: 12%
Priti Patel: 11%
Mel Stride: 2%
Don’t know: 19%… pic.twitter.com/ubGRLBUCUh
The former business secretary previously ran for the Tory leadership after the resignation of Boris Johnson and came fourth.
Rishi Sunak, the former prime minister and current leader of the opposition, will hand over to his successor on 2 November after an extended Conservative leadership contest.
The public didn't vote for Labour to endure 'more economic pain', Green party co-leader says
The Green party co-leader, Carla Denyer, has reacted to Starmer’s speech. She said that people didn’t vote for Labour for more “economic pain” and said that the party could improve people’s lives if their economic agenda was bolder. She singled out Labour’s “refusal to tax the super-rich” as an example of a business as usual approach to politics.
Denyer, the newly elected MP for Bristol Central, has said she believes the four Green MPs elected to the Commons can put pressure on Starmer from the left. She wants Labour to be more radical on the climate, the housing crisis and the funding of public services.
In reaction to Starmer’s Downing Street speech, she said:
Enduring more economic pain and hardship isn’t what people voted for. They were told they were voting for change. Not voting for things to get worse before they get better. Labour needs to be honest about the fact that they could choose to make things better for everyone if they were bolder and braver.
What is being framed as tough choices is actually about political choices. People don’t need a constant reminder that the Tories broke Britain. They need a new approach, not misguided fiscal rules that are set to make things worse.
We must generate the funds needed for investment by shifting the burden away from the poorest onto the wealthiest. Labour’s refusal to tax the super-rich shows that business as usual is very much still in business.
Keir Starmer says the violent riots earlier this month exposed a deeply unhealthy society. But the health of a society can’t be improved if it is forced to swallow the same failed medicine. The government can choose to provide the investment our communities are crying out for. This would help create hope and unleash the goodness of people to improve their communities.
The Green Party manifesto proposed to raise up to £151bn a year in new taxes by 2029, including a new tax on the wealthy, which they claimed would raise about £15bn. Some analysts said many people this would affect would have likely left the UK to avoid paying the extra cash. The party also said there would be a tax rise for earners on more than £50,270.
Updated
Main takeaways from Starmer's Downing Street speech
Here are some of the key takeaways from Keir Starmer’s first major speech as prime minister:
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”.
Starmer said those with the “broadest shoulders” will carry the heaviest burden. He stressed that taxes on “working people” – namely national insurance, VAT and income tax – will not be increased in the 30 October budget, but stressed that “things will get worse before they get better”.
Starmer said removing winter fuel payments for millions of pensioners in England and Wales was difficult. There will be more “difficult” decisions to come, he said, pointing to the government inheriting a £22bn black hole in the public finances from the Conservatives.
Starmer claimed to have found out last week that the Tories had borrowed almost £5 billion more than the Office for Budget Responsibility expected.
Starmer said his government inherited a “societal black hole” made worse by recent rioting, which he said exposed the state of a “deeply unhealthy society”.
The prime minister said his government has done more in seven weeks than the Conservative government did in seven years.
Ed Davey, the leader of the Liberal Democrats, has reacted to the prime minister’s speech. He said “only the out-of-touch Conservative Party will deny the scale of the challenges” facing the government, striking a broadly supportive tone of Starmer.
Davey – whose party won 72 seats in the general election (12.2% of the vote) – 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. Above all, people want urgent, ambitious action to fix the health and care crisis.
Only by getting people off NHS waiting lists can we get the economy growing strongly again and ensure more funding for our public services in the long-term.
Unite chief says 'bleak vision of Britain is not what we need now' after Starmer's speech
Sharon Graham, the general secretary of the Unite union, has criticised the “bleak vision” Keir Starmer delivered in his first major speech as prime minister, saying it’s “time to see the change that Labour promised”.
Graham, an outspoken critic of some of Labour policies, said:
We don’t need more excuses about fiscal responsibility or talk of wealth creation. We should not pit pensioners against workers, that is not a choice that should be on the table.
We now need Labour to have the courage to make the right choices. To be Labour and fight for change for workers and our communities.
She acknowledged that Britain “is in crisis” but said there is money to rebuild industry, infrastructure and public services if it is found in the right places. “If we taxed 1% on the wealthiest 1%, the so-called black hole would be gone,” she wrote in a tweet thread on X.
Starmer emphasised trying to stimulate growth in the economy (instead of just relying on tax rises or spending cuts), but Graham said Britain “can’t wait for growth” and the country’s industries “can’t wait for investment”.
WE NEED CHANGE NOT CUTS
— Sharon Graham (@UniteSharon) August 27, 2024
Austerity mk 2 is not the answer to the UK’s problems
💬 A bleak vision of Britain is not what we need now. It is time to see the change that @UKLabour promised. #Labour
🧵1/6 ⬇️
Unite is calling on Labour to bring in an emergency 1% wealth tax on the assets of the super-rich to pay for 10% pay rises for public sector workers and fill more than 100,000 NHS vacancies.
The demand from Unite, Britain’s second biggest trade union, is in one of several motions to the Trades Union Congress, which meets in Brighton next month, that will expose tensions between the government and parts of the union movement.
Updated
Rachel Reeves to extend support fund to help poorest households
Jessica Elgot is the Guardian’s deputy political editor
Rachel Reeves is set to extend the household support fund, which is due to end next month and helps tens of thousands of households at risk of destitution with cash, food parcels, fuel vouchers and clothing.
The chancellor is understood to be looking at a fifth extension of the scheme, which was launched in autumn 2021 to allow councils to distribute small grants for essentials for people in need. The details of the extension have not been finalised.
The fund was extended four times by the previous government, costing about £2bn, and is a key funder of food vouchers to help struggling parents feed children during school holidays.
The Financial Times reported on Tuesday that Reeves was likely to agree an extension beyond 30 September when the fund is due to expire, partly as a way to soften the impact of the end of the winter fuel allowances for all but the poorest pensioners.
Updated
The press conference is over now. Starmer refused to say whether more safe and legal routes to the UK would be created under his leadership.
Asked if safe and legal routes would be extended, he said:
So far as stopping the boats is concerned, we have got to take down the gangs that are running the vile trade in the first place, which is why we’re setting up the Border Security Command.
It’s why, when we had the European political community meeting just two weeks after I was elected and we had 46 European leaders to Blenheim.
I discussed with them in some detail how we would work better together to take down the gangs that are running this bar trade in the first place. I’m absolutely clear in my own mind that that’s how it will be most effectively done.
Starmer added that he would be drawing on his “experience of having taken down terrorism gangs, those that smuggle guns and drugs” in his previous role as chief prosecutor.
The home secretary, Yvette Cooper, recently announced plans to recruit 100 investigators and intelligence officers to target people-smuggling gangs as part of measures to clampdown on illegal migration.
More than half of the passengers travelling to the UK on small boats have come from countries, such as Afghanistan, Syria, Iraq and Iran, so unstable there is no chance they can be returned. Almost all come from states with which the UK has no agreement to return those not granted asylum.
'I can't build a prison by Saturday', Starmer says as he defends early release scheme
Starmer was asked if he can guarantee early-released prisoners won’t commit crime. From 10 September, thousands of prisoners will start being released 40% of the way through their sentence as part of emergency measures. The prime minister said a framework has been put in place to ensure those who “create the greatest risk” are not released.
Starmer said the previous government pretended that you could have “longer and longer sentences”, while not building more prison spaces to deal with the increase in numbers in the prison estate.
“Here we are without the prison places we need,” Starmer said, adding that opening up prison space will take time.
“I can’t tell you how shocked I was when I discovered the full extent of what they’ve done with our prisons, and it’s going to take time to fix it. I can’t build a prison by Saturday,” he told the media.
“I shouldn’t be sitting in the Cobra room with a list of prison places across the country on a day by day basis, trying to work out how we deal with disorder. But that’s the position I was put in.”
Updated
Starmer said that he will stick to his general election campaign pledge that he will not increase income tax, VAT or national insurance on “working people”. He said that spending cuts and tax rises are not the only levers the Treasury has at its disposal.
The prime minister stressed that his government will focus on growing the economy, and says fixing the transport system and the NHS will both help this. He acknowledged, though, that he will have to take “tough decisions” to plug the black hole left by the Tories but did not specify what these decisions will be.
Starmer was asked specifically if spending cuts are being considered. The prime minister said he won’t “pre-empt the chancellor” in relation to the 30 October budget. There is speculation there could be wealth taxes, pension tax raids and a crack down on non-doms in the budget.
Updated
Starmer is taking questions from journalists. Kiran Stacey, the Guardian’s political correspondent, asked why Starmer cancelled the appointment of his new national security adviser. He asked if the PM can pledge there will be an “open and transparent” process to replace that person.
“Yes, of course, there’ll be an open and transparent process. And no. I’m not going to publicly, discuss, individual appointments,” Starmer replied.
Stacey reported earlier that Starmer had cancelled the appointment of one of Britain’s top generals as the national security adviser.
The prime minister overturned the decision made in April by his predecessor, Rishi Sunak, to appoint Gwyn Jenkins, then the vice-chief of the armed forces, to the most senior security position in the government, officials said.
Although Jenkins will be allowed to apply again for the job, some in Whitehall believe Starmer’s decision is another sign of his determination to promote allies to the most important roles in the civil service.
Starmer says the autumn budget will be 'painful'
Starmer said “things are worse than we ever imagined” after discovering a £22bn “black hole” in the public finances. The prime minister is using this argument to warn that the budget – on 30 October – will be “painful”.
The prime minister 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.
He said “things are worse than we ever imagined”, telling the press conference:
In the first few weeks we discovered a £22bn 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 £5bn more than the OBR expected in the last three months alone. That’s not performative, that’s fact.
Rachel Reeves, the chancellor, is planning to raise taxes, cut spending and make changes to benefits in October’s budget. Reeves will receive the OBR’s initial assessment of the state of the economy early next month, but she believes there is nothing to suggest the government’s underlying financial position is getting any better. Starmer says it “won’t be business as usual” when parliament returns on Monday.
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Starmer has set out some of his legislative priorities to reverse “14 years of rot”. This includes accelerating planing to build homes, harnessing the potential of artificial intelligence for growth, putting the rail service into public ownership and producing clean energy.
Labour has done more in seven weeks than Tory government did in seven years, Starmer says
Starmer says that his new Labour government have “done more in seven weeks than the last government did in seven years”.
“These are just the first steps towards the change that people voted for, the change that I’m determined to deliver,” the prime minister said.
He adds that change will not happen “overnight” and issues need to be tackled at the “root”.
“A garden and a building that were once used for lockdown parties,” Starmer later said during his speech in the rose garden, adding his government is “now back in your service”.
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Things will get worse before they get better, Starmer says
Keir Starmer has said that “things will get worse before they get better”. He said that he didn’t want to release some prisoners early (to avoid overcrowding), especially given his history as the CPS’ chief prosecutor, but that it was necessary.
“It goes against the grain of everything I’ve ever done,” the prime minister said in his speech.
“But to be blunt, if we hadn’t taken that difficult decision immediately, we wouldn’t have been able to respond to the riots as we did, and if we don’t take tough action across the board, we won’t be able to fix the foundations of the country as we need.”
“I didn’t want to means test the winter fuel payment but it was a choice that we had to make,” Starmer continued.
The chancellor, Rachel Reeves, revealed plans last month to introduce a means test for the winter fuel payment, where only those on pensions benefits would qualify, as part of a push to plug what she said was a £22bn black hole in the public finances left by the previous Conservative administration.
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Starmer says riots exposed the state of a 'deeply unhealthy society'
Keir Starmer said the riots this summer exposed the state of a “deeply unhealthy society”, adding that a “mindless minority of thugs” thought hey could get away with criminality because of the broken justice system.
He said:
A mindless minority of thugs who thought that they could get away with causing chaos, smashing up communities and terrifying minorities, vandalizing and destroying people’s property, even trying to set fire to a building with human beings inside it, and as if that wasn’t despicable enough, people displaying swastika tattoos, shouting racist slurs on our streets...
Now they’re learning that crime has consequences, that I won’t tolerate a breakdown in law and order under any circumstances, and I will not listen to those who exploit grieving families and disrespect local communities. But these riots, didn’t happen in a vacuum. They exposed, the state of our country, revealed a deeply unhealthy society. The cracks in our foundations laid bare.
He said the rioters exploited the cracks in the society left by the Conservative government.
“They saw the cracks in our society after 14 years of failure, and they exploited them. That’s what we’ve inherited, not just an economic black hole, a societal black hole, and that’s why we have to take action and do things differently,” Starmer said.
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Starmer gives first major speech since becoming PM in July
Keir Starmer has begun his first major speech as prime minister. He is expected to outline the government’s plans and priorities moving into the autumn. Starmer is due to warn that change will take a decade – not a parliamentary term – to implement, given that the damage that the Conservatives did to the country was so great.
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You will be able to watch Keir Starmer’s speech at 10am on the livestream we will put at the top of the blog shortly.
The prime minister is due to make a speech in the Downing Street rose garden with a vow to “root out 14 years of rot” and “reverse decades of decline”.
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SNP ministers considering limiting universal benefits amid spending cuts in Scotland
Severin Carrell is the Guardian’s Scotland editor
Scottish National party ministers are considering cutting or limiting universal benefits on which its electoral successes were built, including free prescriptions, free bus travel and free school meals, in a concerted drive to cut public spending.
With some of these measures seen as middle-class subsidies, ministers have already ordered cuts to flood defence spending, the Scottish arts budget, council spending on nature restoration and, it has emerged, free iPads for some school children.
The Times reports that Caroline Lamb, the director general for health and social care in the devolved government, has told civil servants there is a £1.1bn spending gap in her department, driven in large part by public sector pay deals recently agreed by ministers.
She told her staff they needed to save £750m this financial year, and prepare for the additional cost pressures of £357m more next year to cover pay increases. The Times reports that free tuition for Scottish university and college students is also under scrutiny.
Shona Robison, the Scottish finance secretary, issued an order to all her department heads earlier this month to implement “emergency controls” on spending driven by the warning from Rachel Reeves, the Chancellor, that the UK government had a £22bn spending gap to bridge.
The chancellor’s cuts to spending for English or pan-UK departments will directly affect Scotland’s grant from the Treasury.
Robison’s instructions have led to officials cancelling some projects, curtailing others or cutting heavily on in-year spending. She is preparing for an emergency spending statement when Holyrood resumes in early September.
These cuts raise significant political risks for the SNP: much of their popularity has been based on the higher per capita spending for Scottish public services than the UK average, and the SNP’s willingness to fund universal benefits, including free bus travel for all over-60s and under 22s; a council tax freeze; abolishing bridge tolls and hospital parking fees; a temporary suspension of peak rail fares and subsidised ferry fares.
Lamb, also the chief executive of NHS Scotland, told her officials “we have been experiencing a worsening, overall, underlying, financial deficit over a number of years”.
“[We’ve] managed to almost limp over the line over the last year or two but we’ve now got to the point where it’s actually a bit of a tipping point,” she told civil servants.
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Senior officials at the Foreign Office repeatedly warned No 10 that Rishi Sunak should not leave June’s D-day commemoration in Normandy early, according to new revelations in a book about the Tories’ 14 years in power.
The department passed on two messages to Downing Street in the weeks leading up to the event, which were then ignored in what has gone down as the worst election campaign blunder of the last 14 years.
The claim is contained in the paperback version of Blue Murder, by the Daily Telegraph’s political editor, Ben Riley-Smith.
The Guardian has also spoken to multiple sources about the events of that day, giving the fullest picture yet of the mistake that came to define Sunak’s campaign and taint his entire premiership.
According to the book, the Foreign Office provided written advice on two occasions before the event telling Downing Street that the prime minister should attend.
The first came a few weeks before the event and the second just a few days before, once it became clear that Keir Starmer would be attending, as would the Ukrainian president, Volodymyr Zelenskiy.
You can read the full story by Kiran Stacey, a political correspondent for the Guardian, here:
Labour party chairman, Ellie Reeves, has been on LBC this morning. She said Labour will tackle the prisons crisis, which has seen the judiciary ask magistrates’ courts to delay sending some criminals to prison in the coming weeks because of unprecedented overcrowding.
Speaking to LBC radio, Reeves said:
The prime minister will be speaking later today about the inheritance from 14 years of Conservative government, the black hole in the country’s finances, but also the societal black hole that we’re facing.
For example, the fact that the prison estate has been operating at 99% capacity with no plan from the previous government to fix that, so he’ll be talking about fixing the foundations.
Under the previous government, we saw the sticking plaster politics papering over the cracks, hoping that something would come up, whereas Keir Starmer, the prime minister, wants to fix the foundations of the country so that people’s lives can be better.
Up to 2,000 prisoners are expected to be released in the second week of September as part of an early release scheme, called SDS40, which will allow many prisoners to walk from prison after serving 40% of their sentences. A second tranche of up to 1,700 prisoners, all jailed for more than five years, are expected to be freed in late October.
A senior official from Napo, the probation officers’ union, said its members were trying to prepare for the early release scheme in September, but the government was unable to maintain staffing levels, let alone recruit more, as required.
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Simon Goodley is a Guardian business reporter
The UK government has awarded KPMG a £223m contract to train civil servants despite pledging to slash state spending on external consultants.
Under the 15-month deal with the Cabinet Office, which is reportedly the second-largest public sector contract ever won by KPMG, the firm will manage training and development services across the civil service.
This includes overseeing courses on policymaking, communications and career development, as well as training for assessed or accredited qualifications run by universities, business schools and specialist providers.
News of the contract, which was first reported by the Financial Times, comes after the new Labour government announced last month it would take immediate action to stop all non-essential government consultancy spending in 2024-25 as part of a move to halve the government consultancy bill in future years.
The cost-saving initiative will save £550m in 2024-25 and £680m in 2025-26, according to Treasury estimates. The government said the civil service headcount cap would be lifted to help departments achieve the target.
The KPMG contract was awarded just days before the government set out its cost-saving proposals, the official record of the contract award sets out. Its maximum value represents nearly 8% of KPMG’s annual UK revenues, making it the second-biggest public sector contract awarded to the firm, according to the data provider Tussell.
The Conservatives accused Labour of “cronyism” after the Sunday Times reported that major Labour donor Lord Waheed Alli was able to access Downing Street, despite not having an official government role.
Alli, a television executive who was given a peerage by Tony Blair in 1998, is a crucial figure in the Labour party, having personally donated £500,000 since 2020. He worked as the party’s chief fundraiser for the general election, having been hired by Keir Starmer in 2022, as the Guardian’s political correspondent, Kiran Stacey, explains in this report.
Ellie Reeves, the Labour party chair, was asked about the reports today. She insisted that the “proper processes” were followed when questioned on why Lord Alli was given a pass to Number 10.
Reeves, who also holds the government post of minister without portfolio, told Sky News:
Well, there’s no rules that prevent someone who has made a donation or had a political job in the past being, having a role.
There are rules that have to be followed, there are processes that have to be followed, and it’s important that those rules are respected.
Lord Alli had a pass for a few weeks. I don’t know all the details of that, but I’m sure the proper processes were followed.
He had a pass for a few weeks, as I understand it, he hasn’t got a pass now. He’s a well respected figure, a Labour peer.
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Minister denies cabinet split over cuts to winter fuel payments
Cabinet Office minister Ellie Reeves has been speaking on Sky News. She has been asked about the decision to start means-testing pensioner’s winter fuel allowance, which would limit payments to people who receive pension credits or other means-tested benefits (here is a useful explainer on pension credit eligibility). Labour MPs have warned that the decision could lead to a “cruel winter” for the most vulnerable people in the country.
Reeves blamed the Tories’ “economic mess” for the restrictions on winter fuel payments and denied claims that Cabinet members are split on the policy.
Speaking to Sky News, she said:
This is an incredibly tough decision, and not one that the Chancellor wanted to be taking, but it’s because of the economic mess that we’ve inherited from the previous government.
The Cabinet are behind the chancellor on this. This is a decision that’s been taken by the chancellor, with the support of the Cabinet, there aren’t splits on this.
It’s a decision that no one wanted to be in the position to have to make, it’s not something that we wanted to do, but it’s something that is the responsible thing to do because of that £22 billion black hole in the country’s finances.
'Is the cabinet split over the decision to scrap the universal fuel allowance for pensioners?'
— Sky News (@SkyNews) August 27, 2024
Chair of the Labour Party @elliereeves tells Sky's @KayBurley 'it's a decision no one wanted to have to make'
Latest ➡️ https://t.co/pXgmhKaDR9
📺 Sky 501 and YouTube pic.twitter.com/r2HK7xoAjB
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Opening summary
Good morning and welcome back to our rolling coverage of UK politics.
Keir Starmer will deliver a heavily briefed speech in the gardens of Downing Street ahead of parliament’s return next week. The prime minister will vow to “reverse a decade of decline” and to “fix the foundations” of the UK economy.
The prime minister will promise that his government will do the “hard work” to “root out 14 years of rot” under the Conservatives.
Ministers have already been heavily criticised for ending winter fuel payments for millions of pensioners. Starmer is also under pressure to end the two-child benefit cap and extend the £1bn household support fund, which is due to end in September.
The prime minister will use his speech – due to be delivered at 10am - to warn that “frankly - things will get worse before we get better” as the Labour administration tries to deal with “not just an economic black hole but a societal black hole”.
Two months ago, I stood on the steps of Downing Street and promised you a government of public service.
— Keir Starmer (@Keir_Starmer) August 27, 2024
Today, I will set out the hard work we need to do in the months ahead to fix the foundations of our country.
Watch my speech live here, from 10am.
He is expected to say:
The riots didn’t just betray the sickness, they revealed the cure, found not in the cynical conflict of populism but in the coming together of a country the morning after and cleared up their community.
Because that is who we are, that is what we stand for. People who cared for their neighbour.
Communities who stood fast against hatred and division. Emergency services who did their duty - even when they were in danger. And a government that put the people of this country first.
Writing in The Times, Starmer said that “once trust is broken, it is difficult to get back”, saying he stood on the steps of Downing Street after the general election and promised to lead a government that would “return politics to public service, to rebuild that hope and trust”.
Reacting to details of the prime minister’s speech, Tory 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.
In other news:
A £40m VIP helicopter contract used extensively by the former prime minister Rishi Sunak is to be cancelled. Starmer and his defence secretary, John Healey, have decided not to renew a contract for helicopter transport which is due to expire at the end of the year after it was extended in 2023 at Sunak’s personal insistence.
The Scottish government has been told to “take responsibility” for fixing the country’s economic issues. Scottish Labour leader Anas Sarwar has sought to capitalise on dire financial news in recent months by releasing what the party is calling a dossier laying out the extent of Scotland’s “economic decline and financial mismanagement” that can be laid at the foot of ministers.
Rachel Reeves could raise at least £10bn a year through a radical shake-up of pensions that would make tax relief less generous to better-off earners, a leading left-of-centre thinktank has said. The report by the Fabian Society says tax breaks for pensions have become markedly more expensive for the government and its proposed changes would fill half the £22bn shortfall the chancellor has identified in the public finances. You can read more on this story here.
It is Yohannes Lowe here with you today. Please do email me on yohannes.lowe@theguardian.com if you spot any typos or omissions.
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