Prime Minister Sir Keir Starmer has responded to criticism over last week’s Budget, saying that the government had to make difficult choices that will ask people to contribute a little more.
The Prime Minister also defended Chancellor Rachel Reeves, saying that she did not mislead the public about the need to raise revenue and that there was a moment where the government considered some kind of breach of its manifesto commitments to raise the revenue needed to fund public spending.
Reeves has been challenged on repeatedly warning about a downgrade to the UK’s economic productivity forecasts ahead of the Budget, despite the Office for Budget Responsibility (OBR) telling her in mid-September the public finances were in better shape than widely thought.
The budget involved making necessary choices, Starmer said, with the alternative of these difficult choices being to cut spending or to gamble through extra borrowing, neither of which he said the government was prepared to do.
Pointing to the scrapping of the two-child benefit cap and the progress the government has made on cutting the cost of living and increasing economic growth since the election, Starmer said he is proud of the government’s record.
He said that Britain was now getting back on track and that the benefits of the government’s approach would be felt in the years ahead.
“I am also confident we have now walked through the narrowest part of the tunnel,” Starmer said.
“Because while I know it’s still hard for lots of people – while I know the cost of living crisis has not gone away – in the year ahead, you will see the benefits of our approach. Not just in the national statistics, but in your communities.”
Looking at the forecasts for growth going forward, Starmer said he is confident the UK can beat its forecasted growth and stressed the importance of reducing inflation to help get borrowing costs under control.
Productivity is also at the heart of the UK’s struggle with economic growth, and Starmer said he aims to deliver a ‘productivity revolution’ to help address issues introduced by austerity and Brexit.
“We must all now confront the reality, that the Brexit deal we have significantly hurt our economy,” he said, adding that the UK must become closer with the EU to secure its economic growth.
Starmer said his government’s approach to improving productivity will include the cutting of red tape around energy and environmental regulations as well as the reform of the welfare state, which Starmer said has trapped people in poverty and hindered young people from finding work.
Leave a Reply