Starmer declines to rule out election pledge-breaking tax rises in budget after claim Treasury must fill £40bn deficit – UK politics live

Starmer declines to rule out election pledge-breaking tax rises in budget, after claim Treasury must fill £40bn deficit

Keir Starmer has defended the government’s handling of the economy, but declined to rule out tax rises in the autumn budget.

Speaking to broadcasters on a visit to Milton Keynes today, he also claimed that he did not “recognise” some of the figures in a thinktank report claiming that in the budget in the autumn Rachel Reeves will need to address a deficit of more than £40bn.

The National Institute of Economic and Social Research argues that tax rises will be needed to plug the hole in government finances. (See 9.39am.)

At PMQs last month Starmer said he was still committed to Labour’s manifesto commitment not to raise income tax, employee national insurance or VAT.

But today, when he was specifically asked in an interview if the Treasury was still ruling our raising these three taxes, Starmer did not give that assurance. Instead he said:

In the autumn, we’ll get the full forecast and obviously set out our budget.

The focus will be living standards, so that we will build on what we’ve done in the first year of this government.

We’ve stabilised the economy. That means interest rates have been cut now four times.

For anybody watching this on a mortgage that makes a huge difference on a monthly basis to how much they pay.

In the first year, we’ve raised wages as well, both in the private sector plus the minimum wage, which means people have got a bit more money coming into their pocket, and so at this stage that will be set out in the budget, but the focus will very much be on living standards and making sure people feel better off.

Asked whether he disagreed with economists warning tax rises in the budget would be necessary to raise revenue, Starmer replied:

Some of the figures that are being put out are not figures that I recognise, but the budget won’t be until later in the year, and that’s why we’ll have the forecast then and we’ll set out our plans.

What’s really important is that I’m very clear about our focus, which will be on living standards and making sure that people feel better-off, partly because more money is coming into their pocket in the first place through better wages, and partly because we’re bearing down on costs like mortgages and other costs to everyday families.

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Some rightwingers are interpreting Keir Starmer’s comments about the economy today, and his focus on living standards (see 12.55pm and 2.14pm), as evidence that growth is no longer his priority. This is from Lord Ashcroft, a Conservative donor and former deputy chair of the party.

Growth growth growth will be our focus screamed @Keir_Starmer and @RachelReevesMP. Seems that will be another u-turn and abandoned as @UKLabour have to deal with a self inflicted 40/50billion black hole…

Ashcroft may have been inspired by this report on the Guido Fawkes website.

The Liberal Democrats have expressed alarm at the news that Southern Water is applying for a drought order that would allow it to draw larger quantities of water than usual from the River Test. Danny Chambers, the Lib Dem MP for Winchester, said:

The River Test is one of the most beautiful rivers in the county and is home to many endangered species like salmon and otters. What Southern Water is proposing simply cannot be allowed to happen – it will damage our precious chalk stream and local wildlife.

This is unfortunately another page in the ever-growing catalogue of Southern Water failures; putting up customer bills whilst pumping filthy sewage into our waterways and handing out large bonuses to their executives.

Green party expresses solidarity with asylum seekers ahead of anti-migrant protests planned outside hotels

The Green party has expressed support for asylum seekers who risk being targeted by protests planned for this weekend outside hotels that house them. The Greens’ spokesperson on policing and domestic safety, Amanda Onwuemene, said:

The unrest we are seeing outside hotels housing asylum seekers and in our communities is unacceptable. The protests are the result of the deliberate spread of myths and lies about asylum seekers and refugees and are being stoked by the far right.

The Green party stands in solidarity with all those who are using their right to seek asylum and who must be feeling unsafe and frightened at this time.

We must remember our basic humanity. Those coming to this country to flee violence include mothers with their children, as well as people of all ages who have endured unimaginable trauma. We have a duty to offer compassion and sanctuary, not fear and intimidation.

Our political leaders also have a duty to show moral backbone and stand firm against the divisive demands of the far right on migration which will only foster racism and Islamophobia in our communities.

On Friday, protests are being planned outside at least 10 hotels in England.

Updated at 10.21 EDT

Southern Water asks environment secretary to approve upgrade of hosepipe ban to cover non-essential water use

Helena Horton

Helena Horton is a Guardian environment reporter.

Steve Reed, the environment secretary, is being asked by a water company to allow sweeping water-use bans including the filling of non-domestic swimming pools and ponds.

Southern Water has asked Reed for permission to extend its hosepipe ban, which came into force last month, to a more severe non-essential use ban.

This prohibits businesses from using excessive water, including cleaning any vehicle, boat, aircraft or railway rolling stock using a hosepipe and the cleaning of any window or exterior part of a non-domestic building or a non-domestic wall using a hosepipe.

It also contains a ban on filling swimming pools and ponds.

Despite the recent rainy weather, England still faces drought this summer after the driest spring and start to the summer since records began. Public water supply reservoirs across England are 69.7% full but some are at historic lows for the time of year, with Yorkshire Water reservoirs now 47% full and the Pennines group 41.2% full.

Water companies have not built a new major reservoir since privatisation over 30 years ago, and they have failed to keep pipes in good repair, meaning 3bn litres of water is wasted each day through leaks.

The Guardian also reported today that Southern Water has angered environmental experts by applying for a drought order which would allow it to drain the River Test, a rare chalk stream which is home to salmon and otters, below ecologically safe levels.

Updated at 09.39 EDT

Living standards expected to rise for midde and high-income families in 2025-26, but fall for poorest 10%, NIESR says

In his comments to broadcasters today about economic policy, Keir Starmer said that his focus was on living standards – and, in particular, how the government could help with policies that drive up wages and drive down costs. (See 12.55pm.)

In its report today the National Institute of Economic and Social Research says that it expects “living standards to grow modestly in 2025-26 for middle- and high-income households but decline for the poorest 10%”. It says that is because “for these households, higher-than-inflation increases in housing and food costs are likely to outstrip income growth”.

And here is what it says in more detail about living standards.

Real personal disposable income (RPDI) rose by 4.1% in 2024-25, on the back of strong real wage growth. While this was a welcome respite from the cost of living crisis since 2022, higher RPDI did not apply evenly across the UK income distribution (table 2.1). Higher-income households benefited disproportionately from pay rises and the concomitant improvement in living standards. Meanwhile, the poorest 10% of households were better off at the end of 2024-25 than in 2022-23 but their living standards are still some 10% below the prepandemic level …

We project weak growth in RPDI, which will increase by 1.1% in 2025 and 1.2% in 2026. While middle- and high-income households will see their living standards improve, low-income households will be adversely affected by two factors. First, lower-than-average increases in earnings. Second, higher inflation for essentials, notably food (whose inflation rate currently stands at 4.5%), that represent a large proportion of budgets of low-income households. As reported in the spring 2025 outlook, food price inflation is rising and expected to outpace the aggregate inflation rate during 2025-26, partly due to a combination of cost pressures on food producers and supply chain issues, with corresponding impacts upon household inflation expectations. We project food inflation for 2025-26 at 5% with effects varying across the distribution by the share of food in the commodity baskets. Taken together, this will likely erode last year’s gains in living standards for the bottom 20% of UK households.

Here is table 2.1

Photograph: NIESRShare

Updated at 09.19 EDT

Chris Philp and Angela Eagle in Twitter spat over his claim ‘one in, one out’ returns deal with France not working

Today Chris Philp, the shadow home secretary, has been on a boat in the Channel investigating the small boats crisis. Following in the steps of politicians like Nigel Farage and Robert Jenrick, who are fond of filming gonzo-style reports for social media, he has posted a video on X claiming to have established that the “one in, one out” returns treaty with France (details of which were only published yesterday) is not working.

I’m on the Channel today just off Calais to see if the Government’s new deal with France is working

It isn’t

There is a boat full of illegal immigrants crossing right in front of me

The French warship is escorting it and & making no attempt at all to stop it

More news later pic.twitter.com/Mpt3ynqzJU

— Chris Philp MP (@CPhilpOfficial) August 6, 2025

He also posted this, where you can hear Philp express his outrage at hearing the commander of a French warship ask for the return of 60 lifejackets provided to people on small boats.

French forces this morning asking for their life jackets back so they facilitate even more illegal crossings

Facilitating illegal immigration is a criminal offence (s25 Immigration Act 1971) – surely that is what is happening here pic.twitter.com/KiSikMDWN7

— Chris Philp MP (@CPhilpOfficial) August 6, 2025

And this.

One of today’s boats I observed earlier

Coming to a hotel near you soon

Proof the government’s new deal is not deterring anyone as predicted

I’m not seeing any women or children there

And France is a safe country, so no one on the boat is fleeing war or persecution in France pic.twitter.com/LkDujoQ9rW

— Chris Philp MP (@CPhilpOfficial) August 6, 2025

In response, Angela Eagle, the minister for border security and asylum, has posted a reply saying that it is wholly unrealistic to expect small boat crossings to stop immediately, and that at least Labour has a “serious and comprehensive plan”, unlike the Conservatives, whose polices all failed, she says.

Angela Eagle’s reply to Chris Philip, posted on X. Photograph: Angela Eagle/X

Replying to Eagle, Philp posted this:

Hi again Angela –

You know Rwanda never started – because the Labour Govt cancelled it just days before it was due to commence.

In 2023 (our last full year) we got crossings down by 30%.

This year they are up over 50% and it’s the worst year *ever*. You can’t blame anyone else for that

Updated at 08.48 EDT

Here are pictures of Keir Starmer and Lisa Nandy attending a music lesson at Milton Keynes central library, as they promoted government plans to spend £88m on youth clubs. (See 8.53am.)

Keir Starmer talking to children and staff during a music lesson at Milton Keynes central library. Photograph: Christopher Furlong/ReutersLisa Nandy talking to children and staff at Milton Keynes central library. Photograph: Christopher Furlong/ReutersShare

The Labour MP Andy McDonald says today’s National Institute of Economic and Social Research report (see 9.39am) shows why the government should consider a wealth tax. In a statement he said:

The time is right to treat the taxation of wealth seriously.

Labour’s Plan for Change must mean that the austerity endured in public services and in peoples pay packets is over and that we ask the wealthy who disproportionately benefited under the Conservatives pay their fair share.

We need to level up existing tax rates on unearned wealth – like capital gains tax – to match rates on earned income. But it’s also time to consider a new tax on wealth.

And it’s clear that many millionaires and billionaires accept this is right and recognise that this country has given them every opportunity to thrive and prosper and they are willing and able to make a greater contribution given the parlous state of the nation’s finances. They should be listened to.

There is growing support in the Labour party for a wealth tax – even though the idea has been dismissed by at least one cabinet minister, Jonathan Reynolds, as ‘“daft”.

Last month Matthew Taylor and Richard Partington wrote this explainer about how a wealth tax might work.