UK Starmer, who said "no tax hike," admits "previous government left fiscal hole... tax increase inevitable"

Blaming the Previous Conservative Government for a 39 Trillion Fiscal Hole
Conservatives: "Prime Minister Starmer Treats the British Public Like Fools"

UK Prime Minister Keir Starmer stated on the 27th (local time) that a tax increase is inevitable in the government budget to be announced in October.

[Image source=Yonhap News]

In a TV speech that day, Prime Minister Starmer explained the financial crisis, saying, "The budget scheduled for October will be painful" and "The situation is more serious than we imagined." He continued, "I will have to make a big request to the public to endure short-term pain for long-term benefits."

Starmer emphasized that he will keep his election pledge not to raise income tax, National Insurance contributions, or value-added tax. Regarding the subjects of the tax increase, he replied, "The budget will be announced in a few weeks, and the details will be decided there."

The Starmer government blamed the Conservative previous government for the financial crisis, calling it "14 years of corruption." Chancellor Rachel Reeves revealed in Parliament at the end of last month that the public sector "financial hole" inherited from the Conservative government amounted to ?22 billion (about 39.1 trillion KRW) and announced plans to cut public spending. In this context, it was reported that the Starmer government decided not to renew the ?40 million (about 704 billion KRW) VIP helicopter service contract used by the Conservative government when it expires at the end of this year.

In response, the Conservative Party launched a fierce attack, saying that the Labour Party, which promised no tax increases during the election campaign, is easily breaking its pledge. Former Prime Minister Rishi Sunak criticized on X (formerly Twitter), "Today’s speech by Prime Minister Starmer most clearly showed the Labour Party’s goal of the tax increases they have been planning."

Conservative Kemi Badenoch also pointed out, "Starmer is treating the British public like fools. He campaigned with promises he cannot keep, and now they have been exposed."

Meanwhile, UK media and experts expect the Treasury to raise capital gains tax and some inheritance taxes.

The UK Office for National Statistics (ONS) announced on the 21st that the public sector net borrowing (balance) for July was ?3.1 billion (5.4 trillion KRW), more than double the expert forecast of ?1.5 billion. This is the highest figure since 2021, when spending was high and tax revenue was low due to the COVID-19 pandemic. Public debt stands at 99.4% of gross domestic product (GDP), maintaining the highest level since the early to mid-1960s.