Key eventsShow key events onlyPlease turn on JavaScript to use this featureThe Labour party this morning is touting a piece in the Sun in which the government is announcing it will pledge £500m to fixing what it terms “the pothole crisis” in Wednesday’s budget.ShareJosh HallidayJosh Halliday is the North of England editor at the GuardianA Labour MP has warned that the government risks embarking on “austerity 2.0” in a stark warning ahead of the budget on Wednesday.Kim Johnson, the MP for Liverpool Riverside, urged the chancellor Rachel Reeves to reverse expected cuts to benefits and the winter fuel allowance, citing fears that “people will die this year unless this cut is reversed”.In a letter to Reeves published on Monday, Johnson writes: “The anticipated £3 billion in sickness benefit cuts risk driving some of the most vulnerable in our society into poverty and could be perceived as austerity 2.0.”Liverpool Riverside is ranked as the most deprived parliamentary constituency in the UK, where 43% of children are classed as living in poverty – more than double the national average.Johnson, a backbench MP who has not shied away from criticising the Labour leadership, writes that her constituency has suffered “systematic impoverishment, skyrocketing inequalities and plummeting living standards under successive Tory governments, while the right and powerful continue to benefit”.She adds: “On 30 October, these communities who voted for change will be looking to Labour to deliver for them. We must not let them down.”ShareDuring his media round this morning Pat McFadden rather hit the nail on the head about the futility of interviews around the time of the budget, when ministers are forbidden from giving any details in advance. He told viewers of BBC Breakfast:
I can’t speculate on the individual measures. We’re in this period where you interview people a day or two before a budget, and we really can’t comment on what might be in it.
It seems like that the question and answer session after Keir Starmer’s speech this morning will mostly consist of him saying “Well, I can’t give you any details, wait until Wednesday” to an increasingly frustrated broadcast journalist pool. We will, of course, bring you any key lines that do emerge when the prime minister speaks.ShareAtkins: Starmer’s budget plans hark back to ‘1970s socialism’Conservative shadow health secretary Victoria Atkins has accused the Keir Starmer government of imposing “1970s socialism” with its budget plans.Speaking on GB News, Atkins, who retained her Louth and Horncastle seat in July’s election, said:
This is socialism that we’ve seen in the 1970s. This Labour government came into power promising they weren’t going to raise taxes. They have this peculiar definition of working people. They don’t seem to understand what a working person is, even though they’ve set this test for themselves.
If you have assets, if you work, if you’re a pensioner looking this winter as to how you’re going to make up that shortfall, given that they’ve slashed winter fuel payments, this is going to affect all of us.
This idea that they’re compartmentalising and separating us into different categories of people that they find acceptable, I think is the very worst of socialism.
It seems unlikely that many on the left of the Labour party would claim that Rachel Reeves is about to launch a set of socialist economic policies in the budget this week.In its election manifesto, Labour ruled out tax rises on income tax, employee national insurance contributions, and VAT.ShareMcFadden reiterates no raises in income taxes, employee national insurance contributions or VAT in budgetOn the BBC Breakfast programme cabinet minister Pat McFadden was asked more about Labour’s definition of “working people”, a phrase which has dominated media coverage in recent days.He said:
I don’t define this by picking a job, or an income level, and relate it to the promises you just mentioned in the manifesto. We were talking about the taxes that people pay on their wages, and we said we will not increase those.
Look, that was true in the campaign. It’s true today. It will be true after Wednesday. We will stick to those promises when the Chancellor updates the budget speech this week.
SharePaul Johnson, director of the Institute for Fiscal Studies, has described it as “frustrating” that both Labour and Conservatives ignored his warning before the election that there was a significant problem with the public finances.He told the BBC Radio 4 Today programme:
One heard the senior politicians from both sides continually saying that there wasn’t this problem, and taxes wouldn’t really have to go up, and growth would source it all.
But everybody knew that there was a big problem with the public finances, and we’d either have to get tax increases or significant spending cuts.
And lo and behold, we’re being told that that has now been discovered, and it looks like we’re going to get something like £40bn of tax increases, if the briefing is to be believed.
And that would make this one of the biggest tax raising budgets ever.
ShareMcFadden: ‘real reasons’ for optimism as country approaches first Labour budget in 14 yearsCabinet minister Pat McFadden has said there are “real reasons” to have optimism as the country approaches the first Labour budget for 14 years later this week.He stated that the government had “inherited a plan to decline, to reduce, investment” from Rishi Sunak’s Conservative government, and that the measures Labour were taking in the budget were “tough decisions” but the start of a turnaround.He told viewers of BBC Breakfast:
I think people should look for three things in the budget. Will it stabilize the country’s public finances and do so in a way that keeps our promises? It will
Will it also start to turn around the public services and the NHS in particular. We will start that road with a combination of both investment and reform.
And critically, will it change the country’s story for the future by investing in the things that we need, the better schools, hospitals, the houses we need, the transport infrastructure, the energy infrastructure. This is what Britain has to do if it’s going to get better economic growth in the future.
What we inherited was a plan to decline, to reduce investment in all of those things going forward. That’s not a role we were prepared to accept we need to invest in the future of the country if we’re going to have a better future. So there are tough decisions in this budget. There are also real reasons to look for hope and optimism, for better public services, a better NHS and a better investment and growth story for the UK in the future.
McFadden has served as Chancellor of the Duchy of Lancaster since July’s general election.ShareStarmer speech to say budget will ‘ignore the populist chorus of easy answers’Keir Starmer will be making a pre-budget speech later today in which he is expected to lay out what he says is the dire state of the fiscal reality of the country, but promise that “better days are ahead”.In briefings given in advance of the speech, the prime minister is expected to say:
This is not 1997, when the economy was decent but public services were on their knees. And it’s not 2010, where public services were strong, but the public finances were weak. These are unprecedented circumstances.
And that’s before we even get to the long-term challenges ignored for 14 years: an economy riddled with weakness on productivity and investment, a state that needs urgent modernisation to face down the challenge of a volatile world.
Starmer will say the Budget will embrace the “harsh light of fiscal reality”, and will have to “ignore the populist chorus of easy answers”.In the 2024 Labour manifesto the party said:
The Conservatives have raised the tax burden to a 70-year high. We will ensure taxes on working people are kept as low as possible. Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of income Tax, or VAT.
ShareWelcome and opening summary …Prime minister Keir Starmer will make a speech today in which he is widely expected to say that this week’s budget will embrace the “harsh light of fiscal reality” because “it’s not 2010”, but he will promise that “better days are ahead”.Here are your headlines …Chancellor Rachel Reeves and health secretary Wes Streeting are visiting a London hospital this morning. Labour’s leader in Scotland, Anas Sarwar, is making a pre-budget visit to a community group in Glasgow.In the Commons there will be housing questions this afternoon, as well as a debate on remembrance and the contribution of veterans. The Lords will see the committee stage of the Water (Special Measures) Bill.It is Martin Belam with you here today. You can reach me at [email protected]