Yesterday (27 August), Prime Minister Keir Starmer took to the lectern, emblazoned with a slogan which he may hope will define his first term in office: “Fixing the Foundations.” The choice of venue – the Downing Street rose garden best known for launching the Con-Lib Coalition Government and Dominic Cummings’ press conference during lockdown – was a not-so-subtle reminder that Starmer’s administration is making a clean break with the past and putting politics back firmly in the service of working people. Indeed, the invited audience were all people he had met on the campaign trail this summer.
Starmer’s opening message was clear: Growth – and with it, wealth creation – is the number one priority of his Government. He reiterated the key policies that defined Labour’s General Election campaign: 1.5 million new homes, GB Energy, and ending public sector strikes.
However, Starmer’s message did not hold back on the reportedly more challenging than expected economic landscape he has inherited. The so-called £22 billion “black hole” in the nation’s finances is, he argued, a clear and present danger, and while the Prime Minister avoided speculating on the details of the Chancellor’s upcoming Budget (scheduled for 30 October), he made it clear that the process will be “painful” and that “things will get worse before they get better.”
Amid the sobering economic outlook, Starmer emphasised that those with the broadest shoulders will have to bear the heaviest burden in October’s Budget. While income tax, employee’s National Insurance, and VAT increases have been repeatedly ruled out, media reports suggest that other options—ranging from employer’s National Insurance and Capital Gains Tax to fuel duty and stamp duty—remain under consideration. Individuals and businesses up and down the country will be considering the impact of what such changes could mean for them.
The groundwork for managing expectations has been laid. But this isn’t just political positioning; all indications point to a Budget as tough as Starmer has forecast. However, before we reach that point, there may be glimpses of the green shoots of optimism at the Labour Party Conference in three weeks’ time. While there won’t be celebratory confetti and balloons at Liverpool’s conference centre (and certainly no glitter), Labour has every reason to feel confident following last month’s landslide victory.
But, this won’t be a victory lap. The tone will be serious, and the focus on long-term delivery. “Fixing the Foundations” will be a core theme, woven through every speech and every commitment. Labour is setting out to repair, reshape and reform the economic landscape—and the seriousness of this task will be evident in everything they do.
While the full details of October’s Budget won’t be known for some weeks, we do know that those who are most able will bear that burden. Nevertheless, the Government’s strong commitment to growth and its clear pro-business agenda should provide reassurance. By tackling fiscal challenges now, the Government aims to pave the way for a more stable and prosperous environment where businesses across the UK can thrive.
If you’d like to find out more about how the new Government and upcoming October Budget could impact your business, and how Cavendish are best placed to help you, get in contact with us here.
