Keir Starmer seeks to ‘inject hope’ but fails to rule out fuel duty rise

The Prime Minister said a ‘painful’ Budget in October was a ‘vital step’ towards changing the country for the better.

Sir Keir Starmer speaks to a huddle of journalists in the German chancellery in Berlin

The Prime Minister has insisted things will improve by the next election as he sought to “inject some hope” after Tuesday’s warnings of more pain to come.

But he was unable to say a rise in fuel duty would not be part of the package when the Budget is announced on October 30.

In his speech in 10 Downing Street’s garden on Tuesday, Sir Keir warned the next Budget would be “painful”, and the public needed to “accept short-term pain for long-term good”, taken by some as paving the way for tax rises.

Speaking to reporters in Berlin on Wednesday, Sir Keir said the public would still see an improvement by the end of the Parliament.

Sir Keir Starmer gives a speech in the rose garden of 10 Downing Street, standing at a lectern beraing the slogan "Fixing the Foundations" — In a speech on Tuesday, Sir Keir Starmer warned the public that things would get worse before they got better (Stefan Rousseau/PA)

He said: “Let me inject some hope because the whole point of this exercise is to make sure we can bring about the change that we need.

“If you don’t clear out the rot and don’t do it properly, you’ve got nothing to build on, and therefore this is a vital step.”

Challenged on specific tax rises, the Prime Minister reiterated his manifesto commitment not to raise income tax, national insurance or VAT – which he has previously described as taxes on “working people”.

But he was unable to rule out the first rise in fuel duty since 2010, saying he would not “speculate” on the Budget.

He said: “Whatever party is in power, the questions about what’s going to be in the Budget are never questions answered before the Budget.”

“But my absolute determination is to have economic growth. And I do not think that the only levers that a government can pull, particularly a Labour government, is simply tax and spend.”

Commentators have warned that fuel duty could be increased at the Budget, with the RAC’s head of policy Simon Williams saying the 5p discount cost £2 billion but was not passed on to drivers.

He said: “We’d normally be against any increase in duty, but we’ve long been saying drivers haven’t been benefiting from the current discount due to much higher-than-average retailer margins.”

Rachel Reeves, wearing safety glasses, speaks to two apprentices at the National Manufacturing Institute Scotland. — Rachel Reeves is thought to be considering tax rises in October’s Budget, having claimed the previous government left a £22 billion black hole in this year’s spending plans (Andy Buchanan/PA)

Separately on Wednesday, Chancellor Rachel Reeves declined to rule out increases in inheritance tax or capital gains tax, saying she was not going to “write a Budget two months ahead of delivering it”.

Senior Conservatives have accused Labour of being dishonest about its plans for taxes during the election campaign.

Leadership contender Robert Jenrick said the Government was “shamelessly rewriting history” to lay “the groundwork for huge tax rises” while former prime minister Rishi Sunak said Labour had always been planning to increase taxes.

Along with questions about tax rises, the Prime Minister has attempted to fend off accusations of cronyism following revelations Lord Waheed Alli, a major Labour donor, had received a security pass for 10 Downing Street.

Sir Keir denied that there was any impropriety in giving Lord Alli a pass, saying he had been assisting in Labour’s transition into Government.

He said: “He had a pass for a short time, the work he did finished and he hasn’t got a pass any more. That’s the long and the short of it.”

The Conservatives have written to Simon Case, the Cabinet Secretary, demanding more details on the circumstances of Lord Alli’s pass.