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Keir Starmer braces households for ‘painful’ October Budget
Prime Minister Keir Starmer has warned UK households that the budget in October will be painful, in a speech in the garden of Downing Street today.
The Labour leader addressed journalists in the Downing Street rose garden, and though he said income tax, VAT and National Insurance would not be increased, “things will get worse before they get better”.
Starmer said: “I will be honest with you, there is a Budget coming in October and it is going to be painful.
“We have no other choice given the situation we are in. Those with broader shoulders should bear the heavier burden – 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 have let sewage flood our rivers, lakes and seas.”
However, the PM said he will also have to rely on the country and “make big asks of you as well”.
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The government will have to take action “and do things differently”, which is due to inheriting a black hole in the UK’s public spending of £22bn, according to the PM.
Winter Fuel Payment cuts will remain
As well as outlining the Labour Party’s plan until the end of the year, Starmer also addressed the Winter Fuel Payment cuts announced earlier this month, which will hit around 10 million people aged over 65.
Despite pressure from campaign groups, charities and a petition by Age UK over the means-tested method of the payments, he insisted this policy will remain.
Between October and January 2025, pensioners will only receive the £200 or £300 payment if they receive certain state benefits, including Income Support and Pension Credit.
Starmer told journalists: “I didn’t want to means-test the Winter Fuel Payment, but it was a choice that we had to make, a choice to protect the most vulnerable pensioners while doing what is necessary to repair the public finances.”
“So far as the winter fuel allowance is concerned, firstly I would say it’s not a particularly well-designed scheme. Frankly, I think everybody would concede that.”
He added: “I do think it’s important that we make sure the support is there for those pensioners who need it most, which is why we’re pushing for the Pension Credit to be taken up and looking at other allowances.”
Ahead of the next Budget by Chancellor Rachel Reeves, Ian Cook, chartered financial planner at Quilter Cheviot, responded to the PM’s speech.
He said: “The key to effective financial planning in the face of potential budget changes is staying informed and flexible. While it’s essential to prepare, it’s equally important not to make hasty decisions based on speculation.
“Keep an eye on official announcements and be ready to adjust your plans as more details become available”.
This article is based on one that was first published on Mortgage Solutions‘ sister site, YourMoney.com. Read: Keir Starmer braces households for ‘painful’ October Budget – here’s how to prepare