Politics latest: Starmer offers biggest clue so far on which taxes might rise in 'painful' October budget

Sir Keir Starmer has given a major Downing Street speech about his plans for government ahead of parliament's return from recess next week, warning of "unpopular decisions" to come in a "painful" budget in October.

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We're bringing our live politics coverage to a close for the evening.

It was a day that saw Prime Minister Sir Keir Starmer lay the groundwork for possible tax rises in the October budget, which he warned would be "painful" and include "unpopular decisions".

For a full round-up of the day's events, scroll down to our 5pm bulletin or tap through the key points above.

You can also read a report on the PM's speech today below:

We'll be back tomorrow from around 6am.

Have a nice evening.

Government cancels £40m contract for Sunak's 'VIP' helicopter

Turns out you don't have to wait until the budget on 30 October for new government spending cuts.

It's just been announced a contract for a "VIP" helicopter service used by Rishi Sunak and other former Tory ministers won't be renewed.

Labour said it would have cost the Ministry of Defence £40m.

Back in May, Downing Street admitted Mr Sunak used the helicopter, which was taxpayer-funded, to fly to Southampton.

'Grossly wasteful'

A spokesperson said the chopper had become "a symbol" of the Sunak government, described as "grossly wasteful" and "out of touch".

The Labour spokesperson added: "Given the sacrifices the British people will have to make as a result of the last government, it's only right that this service is brought to an end."

Starmer taking expectation management 'to a new level' ahead of budget

Some more reaction now to the prime minister's speech this morning, where the dire economic situation he said his government had inherited looks almost guaranteed to lead to tax rises in the autumn budget.

James Smith, research director at the left-leaning Resolution Foundation think tank, told Sky News while it's "not unusual" for governments to "manage expectations down" before a budget, Sir Keir Starmer was taking that "to a new level".

The Labour leader has a "political reason" for saying the situation is difficult, but it depends on where you look, he said.

Economic growth "has been pretty good - the strongest in the G7 over the first half of this year".

"But if you look back a bit further, the size of the economy per person is smaller than before the pandemic and living standards shrank over the last parliament," Mr Smith continued.

He said the public finances overall do look "in a terrible state", with debt higher than any time since the 1960s and government borrowing running pretty high too.

The full story on PM's gloomy speech

Speaking from the rose garden in Downing Street this morning, the prime minister gave the biggest hint yet that taxes would be raised in his government's first budget on 30 October. 

He did, however, repeat his election promise that taxes would not go up for "working people".

For our full report on Sir Keir Starmer's speech, read more below from political reporter Tim Baker:

PM offers clue on which taxes might rise - as he makes early case for two terms in power

Sir Keir Starmer is asking for more time and to trust him.

As expected, the prime minister used his speech this morning to lay the blame for the myriad of problems in this country on 14 years of Tory rule. 

He said successive Conservative governments allowed a "rot" to set in that will take a decade to reverse - which is essentially an ask for two terms in power.

But he also spoke about bringing honesty and integrity back into politics and with that sentiment, he made a pretty stark admission.

He described the budget that's coming in October as "painful" and especially for those "with the broadest shoulders" - the biggest clue so far about where there might be tax rises. 

And too, an explanation for what Starmer calls "difficult choices" as he asks the public to "accept short-term pain for long-term good".

We're on the final stretch towards the return of parliament next Monday and the prime minister had his own back to school-style speech in Downing Street this morning.

It may have been delivered from Number 10's rose garden, but it was anything but rosy - here's what you need to know:

  • Sir Keir Starmer has warned of "unpopular decisions" and a "painful" budget this coming October;
  • The PM said his government would "fix the foundations" and deliver change, but stressed it wouldn't come quickly because the legacy left by the Tories is "worse than we ever imagined";
  • Having said those with the "broadest shoulders" should do the most, our political correspondent Serena Barker-Singh said the PM offered his biggest hint yet about which taxes will rise.
  • Sir Keir defended the "difficult decision" to scrap winter fuel payments for most pensioners;
  • He said negotiating pay rises for junior doctors and train drivers was the right move for the economy, as otherwise hospitals and the railways "can't operate properly";
  • And on the riots and prisons filling up, he blamed the Conservatives for not building enough jails, saying it was not a great situation but he "can't build a prison by Saturday";
  • Sky News understands there are just 100 spaces left for male prisoners.

That's all for now - we'll have more updates and analysis for you before the Politics Hub comes to a close at around 6pm.

Work to remove unsafe cladding 'going far too slowly', says Rayner

A little earlier we reported on Angela Rayner's visit to the scene of a tower block fire in Dagenham, east London (see 15.12 post).

The building was engulfed in flames on Monday, forcing firefighters to rescue some 20 people from their homes and evacuate dozens more.

Ms Rayner, who is the deputy prime minister and housing secretary, said people would rightly be "incredibly worried" given the building was undergoing remediation work for cladding.

A legacy of the Grenfell Tower fire was a legal requirement to remove similarly unsafe cladding from other buildings.

The deaths of 72 people on 14 June 2017 prompted a huge remediation programme across the country, focusing on the specific type of panels used and priority given to high-rise buildings.

Ms Rayner said that work has been going "far too slowly".

'People must feel safe in own homes'

Ms Rayner said she would be meeting with building safety regulators and the Health and Safety Executive on Wednesday to remind them of their "legal obligations" - including ensuring buildings have fire escape routes and alarms.

"These are not assets," she said.

"These are people's homes. People need to feel safe in their own homes."

Only 100 spaces left in male prisons

By Tim Baker, political reporter

Just 100 male prison places are left, Sky News understands.

The Labour government has repeatedly accused the Conservatives of neglecting the justice system, leaving prisons at risk of overflowing.

Last month, Sir Keir Starmer green-lit plans for some prisoners to be released after serving 40% of their sentence - rather than the usual 50%.

But arrests in the wake of the recent riots as well as bank holiday events like the Notting Hill carnival, music festivals and football matches have pushed capacity even closer to a maximum.

PM: I can't build a prison by Saturday

Speaking in Downing Street this morning, the prime minister said: "I can't tell you how shocked I was when I discovered the full extent of what [the Conservatives have] done with our prisons.

"And it's going to take time to fix it. I can't build a prison by Saturday.

"We will fix it, we've already taken the measures that are necessary to make sure we can get through the disorder.

"But I shouldn't be sitting in the COBRA room with a list of prison places across the country on a day by day basis, trying to work out how we deal with disorder.

"But that's the position I was put in, and it's frankly not good enough."

Tory party chair denies they left a mess

Sir Keir Starmer has laid a host of charges at the feet of the previous Conservative governments - from breaking the economy and leaving jails with hardly any space, to fuelling populism that fuelled the riots.

Those accusations have just been put to the interim chairman of the now opposition party, Richard Fuller.

"I don't think that's right," he said of the prime minister's claim the Tories had left a £22bn "black hole" of unfunded spending promises.

"Obviously, halfway through any financial year, they'll be overspend in some areas, under spends, and others there'll be tax receipts that might be above expectations or not."

'Nonsense' to say Tories fuelled populism

It was put to him that one of the ways Labour are looking to save cash, scrapping the winter fuel payment for most pensioners, was previously under consideration by the Tories.

He said it would have been a "good policy in the summer time" - not when the energy price cap is about to go up.

And on the Tories fuelling populism, he described that as "nonsense", suggesting the PM was trying to "politicise acts of vandalism".

Mr Fuller did acknowledge a problem with prison places - the Tories were indeed committed to releasing prisoners early too, as Sir Keir chastised Rishi Sunak about at PMQs in May.

Working people bound to be hit by tax rises, says think tank

Despite pledging not to raise income tax, national insurance, and VAT, Labour's budget this autumn will still likely hit working people, an economic think tank has said.

The Institute of Economic Affairs said the prime minister's speech this morning was "softening voters up" for tax rises in the October budget, which could include things like higher taxes on businesses and savings.

'Workers usually lose out'

Sir Keir Starmer hinted earlier that those "with the broadest shoulders" would carry the burden of any tax rises.

Tom Clougherty, executive director at the Institute of Economic Affairs, said: "It is important to remember the incidence of a tax doesn't always fall on the person who pays it. 

"Workers usually lose out when corporation tax is increased, for example. 

"Significant tax increases that don't affect 'working people' are a fantasy."