Starmer warns of at least £15billion cuts in Budget
SPENDING and welfare cuts totalling at least £15billion are coming in next month’s Budget, Sir Keir Starmer has warned.
The Prime Minister said he and Chancellor Rachel Reeves were determined to fill a £22billion ‘black hole’ they claim was left in the public finances by the Conservatives.
Signalling that drastic cuts should be expected in the October 30 Budget, he said he was ‘not prepared to put it off’.
Ms Reeves announced a series of measures to save money in July, including the controversial plan to axe the winter fuel allowance for ten million pensioners. But these saved only £5.5billion, leaving the Chancellor with more than £15billion of cuts still to find to meet her own £22billion target.
Whitehall sources have warned that tax rises will be of little use in filling the hole as most would not raise money in time.
Instead the focus will be on cutting spending plans and curbing welfare costs.
Defence Secretary John Healey has confirmed the Ministry of Defence has been asked to contribute to the cutbacks, despite the fragile security situation.
However, Sir Keir insisted that immediate action was the right approach, however ‘tough’ it might be.
He said: ‘We aren’t going to get economic growth if we don’t stabilise the economy – we’re going to do the really hard stuff now.
‘That’s why we’re going to deal with this £22billion black hole now. I’m not prepared to put it off, or leave it until next year or the year after. I’ll be judged in five years on whether I’ve delivered the change I’ve promised to the country in relation to the economy, living standards, the health service, public services and whether people feel better off.’
Following warnings that the PM’s downbeat approach is damaging the economy, and amid growing concerns in the City that private sector investment could be deterred by higher taxes in the Budget, Sir Keir said: ‘If it promotes economic growth it’s in the Yes column, if it is inhibiting growth it’s in the No column.’
Sir Keir also hinted that Labour could rewrite its own ‘fiscal rules’ to allow an extra £20billion in borrowing – easing the pressure for immediate spending cuts but increasing the burden of debt on future generations.
Shadow Chancellor Jeremy Hunt has accused Labour of plotting to fiddle the rules by changing the definition of debt it uses to meet its plan to get national debt falling within five years.
Asked about the claims, the PM said: ‘It’s important to borrow to invest. That was part of what we said before the election. That’s not a new principle. But we have got to make sure we have strong fiscal rules in place.’