KEY POINTS
- The Labour government have already announced the end of winter fuel payments for some pensioners
- Starmer and Reeves have previously ruled out raising income tax, national insurance, or VAT in the budget.
Amid growing concerns about the upcoming Autumn budget, netizens are expressing their anxieties over potential tax increases and benefit cuts, as Prime Minister Sir Keir Starmer warns of "tough decisions to come."
In a speech delivered from his Downing Street garden, Starmer gave his clearest indication yet that tax rises are on the horizon in the October budget. He warned that "painful" decisions are unavoidable after Labour discovered what it describes as a £22 billion black hole in public finances.
"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," Starmer stated. "Those with the broadest shoulders should bear the heavier burden, and that's why we're cracking down on non-doms by making it harder to claim non-domiciled tax status."
Acknowledging the difficulty of the situation, Starmer added, "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."
Winter Fuel Payments Slashed Amid Rising Energy Costs
One of the most contentious issues surrounding the upcoming budget is the government's decision to end winter fuel payments for certain pensioners. This decision comes at a time when the energy regulator Ofgem has announced a £150 increase in household energy bills starting in October.
The Prime Minister has been urged to reconsider this move, as the combined impact could be disastrous for pensioners, particularly those on low or modest incomes or those living with ill health. Starmer acknowledged the severity of the situation, calling it a choice he "has to make" and a decision he "didn't want" to make.
Analysis reveals that this winter's energy bills will be the highest on record for older people who previously received winter fuel payments of up to £300. Introduced by Tony Blair's Labour government in 1997, Winter Fuel Payments have been available to all pensioners. However, the new changes mean that only those receiving Pension Credit or certain other benefits will continue to be eligible.
The payment amounts will remain unchanged, with £200 for those aged between 66 and 79, and £300 for those over 80.
Charities and Pensioner Advocates Voice Concerns
Charities supporting older people have sharply criticised the government's decision. Caroline Abrahams, Director of Age UK, expressed deep concern over the impact on vulnerable pensioners.
"An estimated two million older people will face an even steeper mountain to climb in paying their energy bills and staying warm and well when the weather chills. With pensioners also losing the cost-of-living payments they've received over the last two years, we simply cannot see how some of them will cope," Abrahams warned.
Despite these concerns, Starmer and Chancellor Rachel Reeves have ruled out raising income tax, national insurance, or VAT in the forthcoming budget. However, after repeatedly assuring the public that their government's plans did not require further tax increases, they now admit to being surprised by the scale of the financial shortfall they have uncovered.
A £22 Billion Black Hole in Public Finances
Starmer revealed that within the first few weeks of Labour's government, they discovered a £22 billion gap in public finances. "In the first few weeks, we discovered a £22bn black hole in the public finances," Starmer said. "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 a fact," he added.
Netizens React with Anger and Anxiety
The Prime Minister's speech has sparked a wave of reactions online, with many expressing frustration and fear about the impending budget. One commenter voiced their concern, saying, "That'll be right. Raising council tax and hitting pensioners again. They've already stopped the winter fuel allowance at a time when the fuel cap is going to rise! It's a double whammy for pensioners, especially if you are just a few quid above the amount to claim any benefits, which is about 90% of them!"
Another netizen criticised the government's handling of public finances, stating, "The black hole in the finances is all the fault of the politicians. They waste billions every year, and no one is accountable. They must get their house in order and sort out the Civil Service and their unsustainable Public Sector Pensions. The Private sector has done more than its fair share."
With the Autumn Budget set to be announced by Chancellor Rachel Reeves on Wednesday, 30th October, the nation waits anxiously to see how these "painful" decisions will unfold and what they will mean for pensioners and the broader public.
