'Things will get worse before they get better': Starmer warns Budget will be 'painful' in speech

Keir Starmer has warned the country things will 'get worse before they get better' in a major speech on Tuesday morning, as ITV News' Deputy Political Editor Anushka Asthana reports

Sir Keir Starmer has said the public's finances "are worse than we ever imagined” in a major speech this morning, as he admitted October's Budget will be "painful".

Delivering his speech in the Downing Street rose garden, Starmer asked the country to “accept short-term pain for long-term good”, in what is perhaps the biggest hint that tax rises are to come.

His government claims to have found out only last week that the Tories had borrowed almost £5 billion more than the Office for Budget Responsibility (OBR) expected, resulting in an unexpected £22 billion “black hole” in the public finances.

The prime minister warned "things will get worse before they get better" and that it won't be "business as usual" when Parliament returns next week because his government has the mammoth task of tackling not only an economic black hole, but also a societal one.

In the wake of the riots that wreaked havoc across the country, the prime minister condemned the disorder which "laid bare" the "cracks in our foundations" that he said were further "weakened by a decade of division and decline" under the Conservatives.

Pledging his government will "root out 14 years of rot", he said: "Those people throwing rocks, torching cars, making threats - they didn't just know the system was broken, they were betting on it, gaming it.

"They thought 'they'll never arrest me and if they do, I won't be prosecuted, and if I am, I won't get much of a sentence.'

"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.

"A part of that is being honest about the choices we face, how tough this will be and frankly, things will get worse before they get better."

Laying out the scale of the problems the country faces, the PM pledged to "get a grip" of the economy, NHS wait lists and overcrowded prisons.

He claimed his government has done more in seven weeks than the Conservative government did in seven years to tackle the root of issues such as industrial action to help the economy grow.

On October 30, Chancellor Rachel Reeves is expected to raise taxes in her Budget after accusing the Tories of leaving the £22 billion shortfall in the public finances.

Starmer rebutted suggestions he is being "performative or playing politics" by outlining the shortfall, adding: "Let’s remember the OBR 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 £5 billion more than the OBR expected in the last three months alone.

"That’s not performative, that’s fact.”

However, he said he was “not going to pre-empt the Budget” when pressed on what tax rises and spending decisions the government is considering to announce on October 30, although he reiterated his pledge on the “triple lock for working people”.

“We were being honest about the situation before the election, we set out very clearly what we would be doing with tax rises,” he said. “I made it clear on numerous occasions that national insurance, VAT and income tax would not go up, the triple lock for working people, and that remains the position.

“I also set out that our plans were fully funded and fully costed. What I did not expect was a £22 billion black hole.”

He went on to say he will "not shy away from making unpopular decisions” if it's right for the country long-term, following criticism of his plans to impose restrictions on winter fuel payments.

“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," he said.

“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."

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The prime minister's address comes with Labour battling accusations of cronyism after it emerged Lord Alli – who has donated more than £500,000 to Labour over the past 20 years and provided clothing, “multiple pairs of glasses” and accommodation for Starmer – was given a pass to Number 10 despite not having a formal job there.

On Sunday, senior minister Pat McFadden said it had been a temporary arrangement to allow Lord Alli to attend political meetings, adding that he no longer had a pass.

The speech and press conference, ahead of MPs returning to Westminster on Monday, is an attempt by Starmer to manage expectations about the time needed to turn things around – he has previously spoken about the need for a “decade of national renewal”, implying at least two terms of Labour rule was needed.

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He used his speech to claim the government had to undertake daily checks on the number of prison places to “make sure we could arrest, charge and prosecute people quickly” during the recent riots.

“That’s disgraceful,” he said. “No prime minister should ever be in that position when trying to deal with disorder. That’s what we inherited, that’s what we will fix.”

Pressed further on his Government’s tax and spend plans, Starmer told reporters: “We have to get away from this idea that the only levers that can be pulir Keirled are more taxes or more spending. Our number one mission is to grow the economy to make sure we are creating the money in the first place – that remains the number one mission, nothing knocks that mission.

“And that’s why it’s really important we have a transport system that works, that’s why it’s really important we have an NHS capable of getting through the backlog, that’s why it’s important we have the national wealth fund, Great British Energy, that we unlock planning so that we can get on.

“All of those decisions are decisions we’ve taken in the first seven weeks to make sure we get the economy where we need it, but we’re going to have to take tough decisions.”

Conservative Party chairman Richard Fuller described the PM's words as "nothing but a performative speech to distract the public from the promises Starmer made that he never had any intention of keeping"

Conservative leadership candidate Kemi Badenoch, who serves as shadow housing secretary, said: “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.”

But Lib Dems leader, Sir Ed Davey, said "only the out-of-touch Conservative Party will deny the scale of the challenges facing the new government and the new Parliament".

"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," he said. “We need bold and ambitious action from the Government to fix this mess."

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