 "Britain desperately tries to fill ‘economic black hole’, PM Starmer says ‘things will get worse before they get better’ – Firstpost")
“We have inherited not only an economic black hole but also a social black hole and that is why we must act and do things differently,” said British Prime Minister Keir Starmer. In the upcoming budget in October, his government is likely to raise taxes and cut spending.
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Prime Minister Keir Starmer hinted on Tuesday (27 August) that his government was likely to impose “painful” higher taxes on the rich, part of a wider plan to repair Britain’s economy and tackle what he described as deep-rooted societal problems left by 14 years of Conservative rule.
Combating the “economic black hole”
Starmer, whose Labour Party won a landslide victory in July’s general election, spoke of the need for tough decisions in his upcoming budget. Speaking in the rose garden of his Downing Street office, he warned that the country faces a difficult road ahead, with measures that, while unpopular, are necessary for a long-term recovery.
“We have inherited not just an economic black hole, but a social black hole, and that is why we need to act and do things differently,” Starmer said. “Part of that is being honest with people about the choices we face and how difficult that is going to be. Frankly, it is going to get worse before it gets better.”
Addressing an audience that included apprentices, teachers, nurses and small business owners, Starmer stressed his need to restore trust in government and mend the fabric of British society. He said the Conservative fabric, which favoured populism over problem-solving, had been torn apart.
Expectations for Rachel Reeves’ fall budget
Britain’s national debt stood at £3.1 billion last month, more than double the amount in the same period last year.
Chancellor Rachel Reeves is expected to present the autumn budget on October 30. It is likely to include tax increases, spending cuts and tougher welfare policies to improve Britain’s dire financial situation. Despite stronger-than-expected economic growth in the first half of 2024, Reeves warned that a significant budget deficit remains.
Reeves has ruled out increases in income, corporation and value added tax, leaving limited scope for improving public services and increasing investment.
“We are determined to take the difficult decisions necessary to restore economic stability and build a fairer society,” Reeves said last week, acknowledging that the British government faces a difficult road ahead in battling the twin crises of economic and social instability.
With contributions from agencies
