Keir Starmer Budget speech: Key points and stream as PM vows tax rises to stop austerity

Prime Minister Keir Starmer has warned Labour must “run towards tough decisions” in the Budget, warning of tax rises to avoid “devastating austerity” planned by the Tories.

He also threw down the gauntlet to the opposition to spell out where they would make cuts or hike taxes to avoid them, and confirmed a bus fare cap will be extended but rise to £3 – and promised a £240m back-to-work support package.

He told voters “better days lie ahead”, but said Labour’s first Budget would “embrace the harsh light of fiscal reality”.

In his speech in the West Midlands, the Prime Minister highlighted the “unprecedented” economic circumstances his government inherited from the Conservatives and the need to address “long-term challenges” ignored by the Tories.

READ MORE: Bus fare cap to rise 50% from £2 to £3 as Starmer blames Tories

READ MORE: Labour’s Budget 2024: What policies could Rachel Reeves announce?

Among the measures Rachel Reeves is reportedly set to announce on Wednesday include an increase in national insurance contributions paid by employers, a rise in the rate of capital gains tax on share sales and a 4.5 percent annual funding boost for the NHS.

Recap the key points from the speech as it happened this morning here, plus a stream to watch it back:

12.10pm: ‘We will build a Britain where those who can work, will work’

More on the £240m cash injection to accelerate the rollout of local services to help people get back into work.

Chancellor Rachel Reeves has said: “Due to years of economic neglect, the benefits bill is ballooning. We will build a Britain where people who can work, will work, turning the page on the recent rise in economic inactivity and decline and towards a future where people have good jobs and our benefits bill is under control.”

11.56am: PM comments on Mike Amesbury allegations

Keir Starmer has described footage of an alleged assault involving suspended Labour MP as “shocking”. Mike Amesbury was suspended from the party after footage which appears to show him punching a man was published by a national newspaper. Read the full story here.

Responding to a question about the allegations, the Prime Minister said: “I’ve seen the video footage, it’s shocking. We moved very swiftly to suspend him as a member. There is now a police investigation and in the circumstances, there is not much more I can say about that.”

11.49am: Bus fare cap to be raised to £3

Keir Starmer has confirmed that the bus fare cap will be raised to £3 from next year. The cap will be in place until the end of 2025.

Starmer said that the £2 cap had only been funded by the Conservatives until the end of this year, but said he recognised the impact that the scheme has had on rural communities that rely on bus routes to get around.

Read the full story here

11.47am: Which taxes would others raise?

Starmer has thrown down the gauntlet to other parties, particularly the Conservatives, saying those who oppose the measures should admit what taxes they would increase or services they would cut.

11.44am: Keeping to promises on tax

Starmer insists he is keeping to the government’s promises on tax, but said that the country needs to fix the foundations to “rebuild our country”.

11.42am: PM ‘won’t change course’

The Prime Minister insists he won’t change course or steer away from the difficult decisions to fix the foundations of the economy.

He said: “We will use the power of government, stability, investment and reform with partnership across the whole of society to deliver on the priorities of the British people.”

11.36am: ‘Harsh light of fiscal reality’

Starmer said that it is time to run towards tough decisions and ignore the populist calls of easy answers to ensure stability to prevent chaos.

He said tax rises are necessary to prevent austerity, protect public services and get the NHS back on its feet.

11.34am: ‘Better days are ahead’

Starmer said that if the country can get through the difficult decisions, “better days are ahead”.

He also said that the government is making decisions on the basis of economic stability that everyone will benefit from.

“A new future is being built – a better future,” he said.

11.31am: ‘No one wants higher taxes, but we have to be realistic’

Keir Starmer has said that the country is not in the same state as it was in 1997 or even 2010 and said the government faces “unprecedented” economic circumstances.

11.29am: £240m to help people back into work

Keir Starmer has announced that a £240 million funding package to provide local services to help people back into work will be included in the Budget.

11.26am: ‘I will defend our tough decisions all day long’

The Prime Minister has said that tough decisions are needed to attract investment and “fix the foundations” of the economy.

“I know some people recoil from the tough decisions we have to make…but businesses can see we are fixing the foundations. Stability, investment, reform,” he said.

11.25am: ‘Working people have had enough of stagnant growth and crumbling public services’

Starmer has said the government is taking a different path to the Conservatives, with stability and long-term decision making.

He said that working people have “had enough of stagnant growth and crumbling public services”.

11.23am: Government ‘getting on with the job’

Starmer said the government is “getting on with the job”, by starting the work of cutting waiting lists, ending strike action and forming GB Energy.

11.21am: ‘Long, difficult but resolute path to restoring country to service of working people’

The Prime Minister has started his speech and said that the government is beginning the path towards fixing the foundations of the economy and putting the country back into the service of working people.

He said every decision by the government will be made with working people “in its mind’s eye”.

11.13am: PM due to speak imminently

Keir Starmer is about to take to the stage for his speech in Birmingham – the background to the podium he will make his address features the words “fixing the foundations”.

11.10am: ‘Landmark week for Britain’

Ahead of his speech in the next few minutes, Keir Starmer has said that the Budget will “put working people first”. He has said in a social media post: “The truth is, the Tories left you to pay the price for their chaos. We will clear up their mess. Step up in tough times, not stand back. We will deliver change.”

This is a landmark week for Britain.

For the first time in 15 years, our Budget will put working people first.

The truth is, the Tories left you to pay the price for their chaos.

We will clear up their mess. Step up in tough times, not stand back.

We will deliver change.

— Keir Starmer (@Keir_Starmer) October 28, 2024

11.00am: ‘Raise tax on booze for Budget’

Interim director of the Social Market Foundation think tank Aveek Bhattacharya has said the government should raise tax on vices such as alcohol, betting and tobacco in the Budget in order to raise more money and improve public health.

You can read his op-ed for LabourList here

10.40am: What will be in the Budget?

Speculation is rife about some of the measures that will be introduced in the Budget on Wednesday, with tax hikes and spending cuts highly anticipated.

Increases in capital gains tax, a freeze in income tax thresholds and a hike in employer contributions for National Insurance are all expected to be announced by Rachel Reeves, as well as savings for some government departments.

Reeves has already announced that the government will redefine its fiscal rules to free up extra cash for investment.

Read more about some of the measures expected in the government’s first Budget here.

9.06am: The mood music dilemma

It will be interesting to see how far Starmer’s speech attempts to strike an optimistic tone about the future, of what he dubbed “better days ahead” beyond short-term Budget pain.

Since well before the election, Labour figures have been grappling with a dilemma over how far to strike a negative tone about the state of their inheritance to explain short-term challenges, versus a more upbeat tone to give people the sense things are on the up or set to be under Labour – or attempt the more complicated task of managing to do both.

So while McFadden sounded gloomy (see 8.52am) saying there’s “no point in telling people ‘everything’s absolutely fine'”, his response was interesting on LBC when asked when we could see “better days” for Britain.

He replied: “we’ve already brought forward some good legislation, improving rights for renters…We brought forward our employment rights bill, we’re setting up GB Energy. We’ve already started work on this, and over the course of a parliament, people will see real and better change in their lives.”

8.52am: ‘The most honest Budget in years’

Chancellor of the Duchy of Lancaster Pat McFadden has been doing today’s broadcast round for the government.

He told Times Radio: “We’re facing up to a difficult situation. It’s important that we levelled with people. There’s no point in telling people, ‘everything’s absolutely fine’, when the prison system is in a state of collapse, when NHS waiting lists are at a record high, when we’ve got crumbling schools.

“There’s so much that’s wrong that we’ve got to fix. And it’s important to set that out honestly and candidly for the public. I think we’ll have the most honest budget on Wednesday that we’ve had for some years.”

8.25am: Why do we know so much of the Budget already?

We’ve been keeping tabs on all the briefings and speculation about the Budget, with a handy round-up of the expected policies here.

But one question it all begs is – why has so much of the expected contents surfaced in the media in advance?

Some information occasionally slips out around Budgets without official sign-off, but the scale and nature of the policies appearing in the media will be seen by some as a concerted effort to shape the narrative – getting both bad news and highly market-sensitive information out of the way now to reduce the risk of grim headlines and investor fright on or after Budget day itself.

Read more of our Budget 2024 coverage:

• Labour’s Budget 2024: What policies could Rachel Reeves announce?
• ‘No fiscal rule is perfect. But this one means welcome investment’
• Fiscal rules: What is Reeves changing – and why does it matter?
• ‘We can avoid taxing workers by hiking capital gains tax’
• ‘A case against cuts, from the winter fuel allowance to the £2 bus fare cap’
• Minister says ‘normal’ for cabinet to seek good deal for departments amid unrest over cuts
• ‘How Labour can fix the worst economic inheritance since 1945′

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