Breaking

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 a "unpopular decisions" to come in a "painful" budget in October.

Please use Chrome browser for a more accessible video player

Watch Sky News live
Why you can trust Sky News
No 10 asked about plans for announcing Larry the cat's death

Larry the cat has been a fixture of 10 Downing Street for years now, outlasting several prime ministers in the process.

He's regularly seen patrolling outside the famous black door, accepting strokes and affection from passers-by, and has been a beacon of stability during some tumultuous times.

'Larry bridges'

A report in The Times said government officials know full well how popular the chief mouser has become - and have drawn up plans for a media blitz to announce his eventual demise.

There's no indication he's unwell, but the tabby is now 17.

The newspaper said officials will say "Larry bridges" when he dies, evoking the plan for when Queen Elizabeth II passed away dubbed Operation London Bridge.

One source said it would have to be handled "sensitively".

The prime minister's spokesperson has now been asked about it, and wasn't giving anything away.

"More details about Larry?" they were asked.

"Don't comment on Larry," was the blunt reply.

No new decision on Ukraine's use of British missiles

Away from domestic issues, and Sir Keir Starmer did field a question about the situation in Ukraine earlier.

It comes as the country faces a barrage of missile and drone strikes from Russia, which Ukrainian officials have described as among the biggest of the entire war thus far.

Kyiv has repeatedly asked for permission to use the British-donated Storm Shadow missiles inside Russia to help "turn the tide of war", however the UK has rebuffed requests amid fears of escalation.

The PM said that hasn't changed for now, but said the government would continue providing Ukraine with resources "for as long as it takes".

For more on this, including an explainer on Storm Shadow missiles, follow our dedicated Ukraine live blog:

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 this lunchtime:

  • 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";
  • The PM also claimed Labour have achieved "more in seven weeks" than the Tories did "in seven years", and said moves to change the planning system and build more homes would drive growth;
  • 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".

That's all for now - stay with us for more reaction to the PM's speech and analysis from our team throughout the afternoon.

Which taxes could increase in the budget?

The prime minister has warned of a "painful" budget in October.

Tax rises will feature, but with the chancellor having ruled out raising income tax, national insurance, and VAT - what could be set for a hike?

Inheritance tax

One of the taxes most likely to be hiked - the threshold could be lowered from £325,000 when someone dies, or people could pay more than 40% on some inheritances.

A leaked recording of Treasury minister Darren Jones, from before he was in government, suggested he favours such a change.

Capital gains tax

This levy is imposed on the profit of a sale of assets.

The government could reduce the minimum limit, or raise the percentage of tax levied - with some calling for it to be set in line with income tax.

Council tax

There is speculation council tax is viewed as "out of date".

While Labour said before the election it would not change the banding of council tax, there may be other updates on the table.

Business rates

This tax is what businesses pay instead of council tax on their properties.

The calculations for how much people pay could be updated to reflect a more current situation with property prices.

Stamp duty

A tax paid on properties over £250,000, which increases for second homes.

Changing this could increase the volume of transactions and raise more money.

Alix Culbertson, political reporter, goes into more detail on the topic of taxes in the piece below:

Sunak responds to PM's statement

Sir Keir Starmer's predecessor as prime minister has responded to his speech this morning.

Tory leader Rishi Sunak said it was "the clearest indication of what Labour has been planning to do all along".

And that, he claimed, is "raise your taxes".

Beth Rigby: Starmer's speech lays ground for painful choices to come

There were two main elements of the prime minister's speech this morning, says Sky News' political editor Beth Rigby.

The first was Sir Keir Starmer saying he was going to deliver on the promises he made during the election, speaking about unlocking planning, building growth and setting up Great British Energy.

The PM also made the "rather ambitious call" to say Labour had accomplished more in seven weeks than the Conservatives had in the last seven years - like working to negotiate an end to industrial action by railway drivers and junior doctors.

But Beth says the biggest element of the speech was the foreboding "pain" of what is to come for the UK, with Sir Keir saying "unpopular decisions" must be made.

"The main part of this speech was a warning to the public that things are going to get worse before they get better," says Beth.

"He was laying the ground for what he himself described as painful choices to be made this autumn."

The reasoning the prime minster gave for this was a need to plug a £22bn spending gap that was "hidden" by the previous government.

However, Beth points out part of that money is because Labour recently handed out billions of pounds settling public sector pay deals.

'Labour are making same mistakes as us', claims top Tory

Opposition parties have been pretty quick to respond to the prime minister's speech this morning.

On the Conservative side, the shadow chief secretary to the Treasury, Laura Trott, accused the government of planning an "incoming tax raid" that will be a "betrayal of people's trust".

Somewhat oddly, shadow housing secretary Kemi Badenoch, who's running to replace Rishi Sunak, said the last Tory government had "made some mistakes" and Labour were now "doubling down" on them, citing immigration and net zero policy.

'Toxic legacy'

Liberal Democrat leader Sir Ed Davey agreed with Sir Keir Starmer that the new government had been left a "toxic legacy" by the Tories, but said "bold and ambitious action" was needed.

He added: "Above all, people want urgent, ambitious action to fix the health and care crisis. 

"Only by getting people off NHS waiting lists can we get the economy growing strongly again and ensure more funding for our public services in the long term."

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".

PM says existing winter fuel payment scheme 'not well designed' and 'costs a fortune'

There were some of other snippets we picked out from the prime minister's answers to questions from journalists after his speech.

Here are the highlights beyond what we've already reported - you can scroll through the Politics Hub for more:

  • He insisted pensioners who need support "most" will still get it despite his government deciding to means test the winter fuel payment - and argued the scheme is "not particularly well-designed" and was "costing a fortune";
  • Negotiating pay rises with junior doctors and rail workers is the right approach, he said, because having "hospitals that can't operate properly" and "a transport system where people can't get to work" hurts the economy;
  • Sir Keir Starmer refused to say whether he'd allow Ukraine to use long-range Storm Shadow missiles in Russia after heavy bombardment from Moscow at the weekend, but insisted he will "stand with them for as long as it takes";
  • And on stopping the boats, he again pointed to his Border Security Command plan and working closer with European partners, and compared taking down people smuggling gangs to his work prosecuting terrorists when he was director of public prosecutions.

That's all for now - we'll have analysis from the PM's speech shortly.

Can the PM guarantee prisoners given early release won't harm anyone?

The PM is asked by Channel 4 about prisons and whether early release schemes carry with them an undeniable risk for the public.

He says a framework has been put in place to ensure those who "create the greatest risk" are not released.

But he adds that the idea of releasing people who should be in prison because there are no spaces for them "goes against everything I've worked for for years".

He blames the current situation on the last government, which he says did not build enough prisons.

"I can't tell you how shocked I was when I discovered the full extent of what they've done with our prisons, and it's going to take time to fix it. I can't build a prison by Saturday."