Starmer: Spending review marks new phase after first year of ‘cleaning up mess'
But local authorities warned an expected rise in council tax of up to 5% was 'not the solution' for making ends meet and would be a 'significant burden' for the public.
'We spent the best part of the first year taking the tough but necessary decisions in relation to, not just our broken economy but everything was broken, I could go on for the rest of this journey just listing things that were broken,' Sir Keir told reporters travelling with him to the G7 summit in Canada.
'Nobody actually argues with that, they might say that it's your job to get on and fix it, but nobody argues that it's broken.
Prime Minister Sir Keir Starmer (left) and Chancellor of the Exchequer Rachel Reeves (PA)
'Year one was cleaning up that mess, stabilising the economy and creating the conditions for the spending review,' he said.
The Chancellor unveiled the review last week, arguing that improvements to the economy have allowed a change of course as she announced plans to pump money into the NHS and give extra cash for schools and transport.
However, experts have warned that tax rises will be needed in the autumn to balance the books if the economic growth Ms Reeves is counting on fails to materialise.
Council tax bills could rise at their fastest rate for two decades as the review appears to assume that local authorities will raise it to the maximum of 5%, the Institute for Fiscal Studies has warned.
The Local Government Association, which represents councils across England, estimates that councils in England were already facing a funding gap of more than £8 billion by 2028/9 before the spending review.
'All councils remain under severe financial pressure. Many will continue to have to increase council tax bills to try and protect services but still need to make further cutbacks,' an LGA spokesperson said.
'Council tax is not the solution for meeting long-term pressures facing high-demand national services.
'An increase in council tax of up to 5% will place a significant burden on households. In addition, increasing council tax raises different amounts of money in different parts of the country not related to need.'
The Prime Minister said council tax rises are for councils to decide and pointed to investments in infrastructure and transport as examples of the moves now being made.
'What the spending review shows is that because of the decisions we've made, now you can see what difference a Labour government makes.
'And this is very 'Starmerite' if you like, those phases, I did it in opposition through to the election.
'The first job is always to clear out, clear up, and then move on from there. That's the stage that is ushered in by the spending review, into the next phase.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
32 minutes ago
- The Independent
‘Evacuate Tehran' – Trump issues warning as he departs G7 leaders summit early
US President Donald Trump has warned 'everyone should evacuate Tehran' as it was announced he would be departing the G7 leaders' summit early due to the situation in the Middle East. The conflict between Israel and Iran has been top of the agenda at the summit of wealthy democracies, taking place in Canada. In a post on Truth Social on Monday, Mr Trump criticised Iran for refusing to agree to a nuclear deal with his administration. 'What a shame, and waste of human life. Simply stated, IRAN CAN NOT HAVE A NUCLEAR WEAPON,' he wrote. 'I said it over and over again! Everyone should immediately evacuate Tehran!' He later added: 'AMERICA FIRST means many GREAT things, including the fact that, IRAN CAN NOT HAVE A NUCLEAR WEAPON. MAKE AMERICA GREAT AGAIN!!!' A new round of nuclear talks scheduled for the weekend between the US and Iran were cancelled after Israel's missile strikes. Later on Monday, White House press secretary Karoline Leavitt announced on X that Mr Trump would be leaving the summit early, following a dinner with heads of state. 'Much was accomplished, but because of what's going on in the Middle East, President Trump will be leaving tonight after dinner with Heads of State,' she said. Downing Street declined to comment on Mr Trump's early exit. Iran said at least 224 people had been killed in the country since strikes began on Friday, while Israeli officials said 24 people had been killed and more than 500 injured. The back-and-forth between Israel and Iran has raised concerns about all-out war between the rival nations. The latest conflict kicked off on Friday, when Israel launched an attack on top Iranian military leaders and the country's nuclear programme. Iran retaliated by firing waves of missiles at Israel. It comes after Sir Keir Starmer urged British nationals in Israel to register their presence there as countries step up efforts to bring back stranded citizens. The Foreign Office has advised against all travel to Israel, but Britons already in the country now face difficulties getting home, with the airspace closed due to the conflict with Iran. The Prime Minister said the UK was issuing advice for British citizens in Israel to register their presence. 'All of us are giving advice to our citizens for British nationals in Israel, we're giving advice today to register their presence, so there will be a portal for that,' he said. Downing Street said its key message to British nationals in Israel was to stay near shelter and follow the advice of local authorities.
The Herald Scotland
33 minutes ago
- The Herald Scotland
Energy bills swollen by Scottish windfarm switch off costs
However, critics focused on the revelation that the Westminster administration planned to use £2.5bn allocated to the fledgling Great British Energy operation to fund work on a new generation of small modular nuclear reactors. SNP supporters slammed the move which they claimed would leave a big hole in the £8.3bn budget that GB Energy had promised would be used to support the development of technologies such as floating offshore wind and tidal energy. Keir Starmer decided to put the official headquarters of GB Energy in Aberdeen to mollify critics of his cabinet's decision to curb oil and gas activity. But the SNP Government has opposed North Sea field developments that could create thousands of jobs. It has pinned its hopes on the expansion of wind power, which acting climate change minister Alasdair Allan claimed recently could create thousands of high-quality jobs in support of a just transition from dependence on oil and gas. The number of renewables jobs created in Scotland, however, has fallen below expectations for years. READ MORE: Just transition furore reignited as SNP Government flounders Mr Allan put the onus on the UK Government to help accelerate windfarm development in Scotland by improving the support provided for developers under the flagship Contracts for Difference programme. Energy secretary Ed Miliband has held out the prospect that the budget for the forthcoming CfD allocation round will be much bigger than the £1.6bn set for the last one. The costs will be added to the bills of householders regardless of their income. But figures from the body that regulates the national energy system show bill payers have reason to be concerned about the wisdom of accelerating a programme that imposes costs on them that many can't afford. The National Energy System Operator revealed that the size of the bill it has to pay to deal with supply issues stemming from the fact that output from renewables such as windfarms is intermittent soared to £2.7bn in the latest year from £2.5bn in the preceding period. The balancing payments include amounts that NESO pays to compensate windfarm operators that are asked to constrain generation when there is insufficient demand. They also include payments made to operators of gas fired power stations to increase output when there is not enough wind power to meet energy requirements. READ MORE: Israeli-owned firm takes control of UK's biggest gas field NESO said the increase was driven by a rise in constraint costs and made clear that this was largely due to the fact that so much windfarm capacity has been added in Scotland although demand is much higher south of the border. 'Whilst payments to generators are distributed throughout the country the cause of cost is concentrated in Scotland,' it said. The organisation underlined the absurdity of the situation we find ourselves in after rushing to develop windfarms without ensuring the required infrastructure was in place to transport the power produced to where it is needed or to store it. The Seagreen windfarm off the Angus coast became fully operational in 2023 (Image: SSE) Noting that wind curtailment is currently a major driver of balancing costs, NESO said: 'This is because a large proportion of wind capacity in GB is connected in Scotland, which at present is a constrained region of the network. 'This means that when wind generation is high we must take actions to turn down wind output and turn on replacement energy in unconstrained regions to keep the system balanced.' The NESO report emphasises that the costs resulting from this situation fall on householders. In 2024/25 balancing charges added around £3 a month to a typical domestic electricity bill. That may not sound much but household bills are also inflated by other charges such as those related to CfDs and the Climate Change Levy. NESO's analysis indicates that developing more windfarms will make things worse for the time being. It warned: 'Balancing costs are expected to rise in the short term, reaching a peak of ~£8bn in 2030.' Part of the solution will involve a massive expansion of electricity transportation networks in the face of potential opposition from locals in areas affected and of storage facilities. However, energy giants such as SSE and Drax have made clear they will only make the hefty investment required to develop hydro storage facilities if the UK Government provides enough support for revenues to ensure they can generate strong returns. READ MORE: Scottish hydropower hopes fade amid threats to bumper projects This all means that power generation assets that can ensure the country can keep the lights on irrespective of weather conditions will be required for years. The case for SSE to be allowed to develop a new gas fired power station at Peterhead has been strengthened after the UK Government agreed to provide £200m initial development funding for the Acorn carbon capture scheme. This will take emissions from the plant for storage in depleted reservoirs in the North Sea. Friends of the Earth Scotland insists the Peterhead plant would be a climate disaster and has berated the Scottish Government for failing to properly interrogate SSE's assurances about related emissions. The organisation is bitterly opposed to plans for the Scottish carbon capture cluster which it reckons could be used to excuse continued production of oil and gas. The SNP Government, however, has spent years pressing UK ministers to fund the Scottish cluster, which could cost around £12bn to develop in full. Scottish Gas owner Centrica recently underlined the scale of expected demand for gas by agreeing a £20 billion deal to secure supplies from Norway until 2035. That deal may have been timely as oil and gas prices have soared in the wake of Israel launching attacks on Iran last week. READ MORE: SNP Government oil hypocrisy shocking amid Scottish jobs cull Against that backdrop it makes sense for the UK to maximise production of its own oil and gas. The case for investing in nuclear plants that can provide baseload power is also reinforced by concerns about the UK's dependence on imports of oil and gas. Nuclear plants take years to develop but could remain operational for decades. Add in the fact that work on a plant could create thousands of construction jobs and many more in the supply chain and it is little wonder the SNP Government is under pressure from trades unions to abandon its opposition to the development of nuclear power stations in Scotland.
BBC News
36 minutes ago
- BBC News
Starmer set to announce new Russia sanctions at G7
The UK is expected to unveil new sanctions against Russia designed to "restrict Putin's war machine" alongside other Ukraine allies on Minister Sir Keir Starmer said the measures would increase economic pressure on the Kremlin to show Vladimir Putin "it is in his and Russia's interests to demonstrate he is serious about peace".However, it appeared unlikely that the US would join the move after Donald Trump signalled his opposition to further measures during the G7 summit in Canada, saying the sanctions "cost [the US] a lot of money".Meanwhile, Ukrainian officials said 16 people were injured after another wave of drone and missiles struck buildings across Kyiv overnight. Downing Street said the new sanctions package would aim to keep up "pressure on Russian military industrial complex" but did not provide further a statement, Sir Keir said he and other G7 partners were finalising the new measures at the Alberta summit, and that they would "squeeze Russia's energy revenues and reduce the funds they are able to pour into their illegal war"."The fact is, Russia doesn't hold all the cards," he why limited information had been released about the contents of the sanctions package, a No 10 spokesman said: "It's just a point of fact that the G7 has only just begun... it would be premature to get ahead of what those sessions will yield."Earlier on Monday, Trump - who announced he would leave the summit early due to the escalating conflict in the Middle East - indicated he did not back the sanctions said: "You're talking about billions and billions of dollars. Sanctions are not that easy. It's not just a one-way street."Trump said he was "waiting to see whether or not a deal" could be agreed between Russia and Ukraine to end the war before signing up to a new sanctions package. During a press conference with Canadian Prime Minister Mark Carney, Trump also called Russia's removal from the G7 group "a mistake" and said it "makes life more complicated".In 2014, then-US President Barack Obama and other world leaders decided to expel Russia from the group of major economies after Russia's annexation of Crimea.
