This morning the Prime Minister held a ‘state of the union’ style address in the Downing Street Rose Garden. He said he wanted to be honest with the British public about the decisions he has made in his first months in office and that he has had to make some pretty tough decisions, but that they have been done in the public interest.

**Scroll down for bullet-point speech summary**

He repeated his Government’s charge that the country was left £22bn black hole by the last Conservative Government. Expect to hear this line repeated over and over for some time. But you can sense genuine anger in his voice when he talks about that inheritance. This is a man, whether you are an avid supporter or not, that has dedicated his life to public service and wants to do his best for the country. You don’t have to subscribe to his political thinking to acknowledge that, and if only privately, there are many Conservative MPs who accept this about the Prime Minster.

Keir Starmer warned that the October Budget “is going to be painful”. Those words did not come off the cuff, they were scripted, and carefully so. This is the Prime Minister giving advance warning of what is likely to come, and he has learned from Liz Truss’s disastrous mini-budget how important it is not to spook the public or the financial markets. So, this is him preparing the ground for what is likely to come and explaining why they are having to make such hard choices. It’s time for that £22bn figure again. He explained that he didn’t want to make the recent changes to the winter fuel allowance, but that they have to find the money that balances the books, and it has to come from somewhere.

The £22bn question is where exactly will he and Rachel Reeves find the money from? They have made it clear it will not be from raising income tax rates, National Insurance or VAT. The “triple lock for working people” as Starmer put it.

So, amid much speculation the obvious places are inheritance tax, where they could save over £6bn on the unused allowance, over £2bn on residence relief and around £1.8bn on changes to business property relief. Capital gains tax is another potential route where Labour could bring this in line with income tax. This would be significant rise from the current situation where the residential property rate is 24% and 20% on other assets, taking it up to 40/45%.

Pensions allowance and relief are further potential routes for tax increases to start filling the £22bn black hole, and then looking at further benefits cuts.

None of these would be easy decisions to make, and that’s precisely why this morning’s intervention was so important to lay the groundwork for difficult October Budget.

This morning Starmer also sought to use his Government’s decision around early prison releases to demonstrate tough decisions that he has been forced to make by the legacy of the last Conservative government. The Prime Minister repeated the point that his career has been about putting people into prison and so he hates the thought of having to deliver early releases due to a lack of prison places. But as we often see with Starmer, he is prepared to make tough decisions and explain why he has made them, in a thoughtful and logical way. He described the summer riots as exposing a “deeply unhealthy society” that has been “weakened by a decade of division and decline”.

That’s why he demanded tough and fast action from the police services through to the justice system, and a Starmer-led Government was not going to accept leniency due to a lack of prison places.

I often think that you get to see the clearest sense of Keir Starmer when he answers journalists questions rather than the pre-prepared speeches he delivers. He physically relaxes a bit more and is prepared to show a bit more of his personality beyond the serious political leader. He makes sure he answers every question asked of him, and is happy to have a bit of laugh, whether it’s appreciating a well set-up question linking to Oasis’s revival or beaming with happiness when talking to Andy Bell about his daughter Georgia’s success in the Olympics. That smile momentarily vanished when Andy continued tough questions around his recent appointments to the civil service though).

This morning’s speech and press conference showed us that Keir Starmer will continue to demonstrate his strong leadership qualities. After all, he was supposed to have been on holiday before the riots began. But anyone who has ever worked with the Prime Minister knows that he sets high standards and leads by example. The next few weeks are going to continue to be tough with no easy choices on the horizon. The key question is whether the Prime Minister has gained enough credit from the British public for them to be able to stomach the medicine he is going to be prescribing.

Topline speech summary

• Sir Keir Starmer, standing outside Downing Street, committed his government to serving everyday citizens such as apprentices, teachers, nurses, small business owners, and firefighters.
• He stated that his Labour government would prioritise addressing pressing issues with a focus on actions rather than rhetoric.
• Economic growth and wealth creation were clearly identified as the top priorities of his administration.
• He publicised early initiatives such as the establishment of a National Wealth Fund, unlocking planning for 1.5 million new homes, the creation of Great British Energy, and the resolution of recent strikes.
• Sir Keir used this opportunity to restate that his government had uncovered a £22 billion shortfall in public finances, which was not previously reported by the Office for Budget Responsibility and claimed this was due to concealment by the previous government.
• The recent riots were cited by Sir Keir as evidence of deep societal issues, with a minority causing chaos and displaying hateful symbols.
• Reflecting on his experience as the former Director of Public Prosecutions, Sir Keir compared the challenges of the 2011 riots to the recent ones, highlighting greater difficulties in the interim.
• He claimed that his government has had to make tough decisions, such as early prisoner release and means-testing the Winter Fuel Payment, in order to address social and economic challenges.
• Sir Keir listed some upcoming pieces of legislation, saying that it will aim to protect taxpayer money, accelerate planning, harness AI, bring rail services into public ownership, and establish Great British Energy.
• Crucially, he warned of a painful Budget in October, claiming that the wealthiest will be expected to bear a larger share of the burden.
• The Prime Minister called for public understanding and support for short-term sacrifices for long-term benefits.
• Sir Keir concluded by highlighting the nation’s resilience and community spirit, as seen during the riots, pointing to that as being key to rebuilding the country.
• He ended by reiterating his government’s mission to grow a strong economy, future-proof the NHS, make streets safer, increase energy independence, and provide equal opportunities for children.

About the author

Joshua Kaile was a Labour Party Policy Adviser, supporting Jim McMahon MP, the Shadow Secretary of State for Environment Food and Rural Affairs, until August 2023, In this role he played a central role in shaping Labour policy development, campaigns and media management. He frequently advised Keir Starmer.

Josh has a long career history with Labour, having previously worked on Keir Starmer’s leadership campaign, as Head of Office to David Lammy MP, Communications and Policy Officer to Janet Daby MP, Digital Officer to Owen Smith MP, and Senior Researcher to Baroness (Angela) Smith.

Photo credit: Number 10 Gov via Flickr