Prime Minister Keir Starmer delivers Budget 2024 speech in West Midlands – six key announcements

The Prime Minister delivered Labour’s first pre-Budget speech in nearly 15 years in Birmingham.

Sir Keir Starmer must explain how his government’s budget will reflect the “harsh light of financial reality” while reassuring people that “better days are ahead”.

The Prime Minister was expected to warn of “unprecedented” economic challenges but said the Government would “get through them”.

According to the BBC, Sir Keir was also expected to say the country was facing an “unprecedented” challenge of weak public finances along with a “collapse of public services”.

He will promise to make what he calls “tough decisions.”

Speculation is growing about tax rises the Chancellor will announce on Wednesday. Rachel Reeves claims there is a £22 billion “hole” in the public finances left by the previous government.

In addition to national insurance for employers, the freeze on income tax thresholds could be extended.

This means that more people are being forced into paying taxes or paying higher rates, and wages are rising and exceeding thresholds.

It was also reported that the government was also considering increasing the tax on the sale of assets such as shares and property, as well as changing its own debt valuation rules to free up money for infrastructure spending. projects.

Six key messages in Prime Minister Sir Keir Starmer’s 2024 Budget speech

In his Birmingham budget speech to Rachel Reeves on Wednesday, the first from the new administration, Starmer made six key statements:

1) He announced that the bus fare cap in England would be extended for a year, but at a higher rate of £3.

2) He said the Chancellor would announce £240 million for services to get people back to work.

3) He said the country needs to accept the “fiction” that it is possible to simultaneously cut taxes and increase government spending.

4) He said he couldn’t make a “cast iron guarantee that there will never be any tax adjustments in any budget again” because “we just don’t know what’s around the corner.”

5) He said his concern was making sure that “there are no more taxes on their payroll” for working people.

6) He sidestepped the question of whether the increase in fuel duty would be considered a tax on working people who use their cars to get to and from work.

Bus fare cap to be raised to £3

Sir Keir told the audience: “Regarding the £2 bus fare, the first thing to say is that the Tories only funded it until the end of 2024 and therefore this is the end of funding for the £2 cap fare.

“I know how important this is, especially in rural communities that rely heavily on buses.

“And that’s why I can tell you this morning that in the Budget we will announce there will be a £3 cap on bus travel until the end of 2025, because I know how important that is.”

From January 2023, bus fares in England are capped at £2 outside London, where they are £1.75 per journey for most routes.

When the Conservative government introduced the policy, it said the routes with the biggest savings per trip were between Leeds and Scarborough (£13), Lancaster and Kendall (£12.50) and Plymouth and Exeter (£9.20 ).

£240m for local services and tax rises

Sir Keir also said the Chancellor will announce £240 million in funding for local services to help people get back to work when she delivers her financial report in two days.

The prime minister also defended tax increases expected on Wednesday.

He said “better days are ahead” and that “tax rises will prevent austerity and restore public services.”

He said that “it’s long past time for politicians in this country to tell you honestly about the trade-offs this country faces and stop insulting your intelligence with the gimmicks of easy answers.

“Working people know that difficult choices must be made. They survived the Liz Truss episode. They have experienced a cost of living crisis.

“So they know that what they want from us – protecting their standard of living, building our nation, improving our public services – they know that can only be achieved with economic stability.

“There are no shortcuts.”

Questions regarding the definition of “workers”

Ministers have faced repeated questions over the government’s definition of “working people” after Labour’s election manifesto pledged not to raise taxes on workers – explicitly excluding increases in VAT, national insurance and income tax.

They have had to make it clear who qualifies and who does not, given the tax hikes expected to be announced this week.

Earlier on Monday, Cabinet Office minister Pat McFadden suggested that “income levels and job descriptions are not the correct way of assessing” whether someone is classified as a working person or not.

Asked on the BBC Today program what people who don’t work are called, he said: “When we talked about people working, we referred to the promises we made in the manifesto about the payroll taxes people pay – they won’t rise when the Chancellor rises to his feet on Wednesday.”

Asked whether people such as homeowners counted as workers, Mr McFadden said: “Frankly, I think the question of income levels and job descriptions is the wrong way to look at it.

“The right way to look at this is: will we stick to the manifesto promises we made on taxes? And we will do it, and you will see it when the Chancellor gets back on his feet.

The Prime Minister also referred to the phrase in his speech in Birmingham, saying his plan to “bring Britain back to the service of working people can only be achieved through actions, not words.”

“Change must be felt,” he added.

“But every decision we’ve made, every decision we’ll make in the future will be made with the working people in mind, the people who have worked harder and harder for years just to stand still.

“People who are doing the right thing may still find a little money to put aside to pay their way, even during a cost-of-living crisis, but who feel this country is no longer giving them or all their children a fair chance.”