PRIME Minister Keir Starmer has warned that the Labour government's first Budget, which is due in late October, will be "painful".

In a speech delivered in Downing Street's Rose Garden on Tuesday morning, the Labour leader said that "tough decisions" would have to be made, but largely declined to say what those decisions would be.

He did rule out increasing income tax, national insurance, or VAT – but also said that those with the "broadest shoulders" would be asked to carry more of the burden, suggesting some tax increases elsewhere.

Starmer's speech, which runs to more than 2200 words, took some 40 minutes to deliver, including the time the Prime Minister took to respond to press questions.

After the event, the SNP's Finance Secretary Shona Robison said it had been a "watershed moment" in UK politics, and warned: "The political choices being made by the new UK government will fundamentally damage our ability to deliver public services in Scotland."

Read Keir Starmer's full speech here: 

Good morning – and welcome. Sunshine, no rain, no wind … probably tempting fate. But it’s really good to see you all here – familiar faces in this garden. So thank you so much for coming along this morning.

When I stood on the steps of Downing Street – just over there – two months ago, I promised this government would serve people like you. Apprentices. Teachers. Nurses. Small business owners. Firefighters. Those serving our communities and our country every day. I promised that we would get a grip on the problems that we face. And that we would be judged by our actions, not by our words.

I said before the election – and I say it again really clearly today: growth, and, frankly by that I do mean wealth creation, is the number one priority of this Labour government. That’s why, in our first few weeks, we’ve set up a National Wealth Fund – because we want every person and every community to benefit. It’s why we’ve unlocked planning decisions – because we are going to build 1.5 million new homes. It’s why we’ve set up Great British Energy – to create good jobs and cut people’s bills.

And it’s why we’ve ended the national strikes that have crippled our country for years. Because I defy anyone to tell me that you can grow the economy when people can’t get to work – because the transport system is broken. Or can’t return to work – because they’re stuck on an NHS waiting list.

We’ve done more in seven weeks than the last government did in seven years. And these are just the first steps towards the change that people voted for. The change I’m determined to deliver. But before the election I also gave a warning. I said change would not happen overnight. When there is a deep rot deep in the heart of a structure, you can’t just cover it up. You can’t tinker or rely on quick fixes. You have to overhaul the entire thing. Tackle it at root. Even if it’s harder work and takes more time.

Because otherwise what happens? The rot returns. In all the same places. And it spreads. Worse than before. You know that – and I know that. That’s why this project has always been about fixing the foundations of our country. But I have to be honest with you. Things are worse than we ever imagined.

In the first few weeks, we discovered a £22 billion black hole in the public finances. And before anyone says oh this is just performative or playing politics. Let’s remember. The OBR [Office for Budget Responsibility] did not know about it. They wrote a letter setting that out. And they didn’t know – because the last government hid it.

Even just last Wednesday we found out that – thanks to the last government’s recklessness – We borrowed almost £5 billion more than the OBR expected in the last three months alone. That’s not performative – that’s fact. But as well as the things we’ve discovered, we’ve also seen shocking scenes across the nation.

A mindless minority of thugs – who thought they could get away with causing chaos. Smashing up communities and terrifying minorities. Vandalising and destroying people’s property. Even trying to set fire to a building – with human beings inside it. And as if that wasn’t despicable enough. People displaying swastika tattoos. Shouting racist slurs on our streets. Nazi salutes at the cenotaph – the very place we honour those who gave their lives for this country. Desecrating their memory under the pretence – and it is a pretence – of “legitimate protest”.

Now they’re learning that crime has consequences. I will not tolerate a breakdown in law and order under any circumstances. And I will not listen to those who exploit grieving families, and disrespect communities. But these riots didn’t happen in a vacuum. They exposed the state of our country. Revealed a deeply unhealthy society. The cracks in our foundation laid bare – weakened by a decade of division and decline. Infected by a spiral of populism which fed off a cycles of failure of the last government.

Every time they faced a difficult problem, they failed to be honest. They offered the snake oil of populism. Which led to more failure. Round and round and round. Stuck in the rut of the politics of performance. And I saw the beginning of that downward spiral firsthand. In 2011, when riots ripped through London and across the country. I was then director of public prosecutions. And when I think back to that time I see just how far we have fallen. Because responding to those riots was hard – of course. But dealing with the riots this summer was much harder.

In 2011, I didn’t doubt the courts could do what they needed to do. This time – to be honest with you – I genuinely didn’t know. Every day – literally every day – we had to check the precise number of prison places we had and where those places were to make sure we could arrest, charge and prosecute people quickly. Not having enough prison places is about as fundamental a failure as you can get. And those people throwing rocks, torching cars, making threats, they didn’t just know the system was broken. They were betting on it. Gaming it. They thought – “oh, they’ll never arrest me. And if they do, I won’t be prosecuted. And if I am, I won’t get much of a sentence”. They saw the cracks in our society after 14 years of failure – and they exploited it.

That’s what we have inherited. Not just an economic black hole. A societal black hole. And that is why we have to take action and do things differently. Part of that is being honest with people – about the choices we face. And how tough this will be. Frankly – things will get worse before they get better. I didn’t want to release prisoners early. I was chief prosecutor for five years. It goes against the grain of everything I’ve ever done. But to be blunt – if we hadn’t taken that difficult decision immediately we wouldn’t have been able to respond to the riots as we did.

And if we don’t take tough action across the board. We won’t be able to fix the foundations of the country as we need. I didn’t want to means test the Winter Fuel Payment. But it was a choice we had to take. A choice to protect the most vulnerable pensioners while doing what is necessary to repair the public finances. Because pensioners also rely on a functioning NHS. Good public transport. Strong national infrastructure.

They want their children to be able to buy homes. They want their grandchildren to get a good education. So we have made that difficult decision to mend the public finances so everyone benefits in the long term – including pensioners. That is a difficult trade off. And there will be more to come. I won’t shy away from making unpopular decisions now if it’s the right thing for the country in the long term. That’s what a government of service means.

This shouldn’t be a country where people fear walking down their street. Their TV’s showing cars and buildings being set on fire. This shouldn’t be a country where the Prime Minister can’t guarantee prison places. But it also shouldn’t be a country where people are paying thousands more on their mortgages. Or waiting months for hospital appointments they desperately need. Where our waters are filled with sewage. Where parents worry that their kids won’t get the opportunities they did. Where nothing seems to work anymore.

So, when I talk about the inheritance the last government left us. The £22bn black hole in our finances. This isn’t about lines on a graph, this is about people’s lives. Your lives. And the Tories are still not being honest. They know their recklessness cost them the election. But they won’t accept the cost that they’ve inflicted on the country. And they won’t apologise for what they’ve cost you. They’re just still thinking about themselves.

This government won’t always be perfect, but I promise you this: you will be at the heart of it, in the forefront of our minds. At the centre of everything we do. That’s why I wanted to invite you here today. To show that decent, hard-working people who make up the backbone of this country belong here. This is a government for you. A garden and a building that were once used for lockdown parties. Remember the pictures just over there, of the wine and the food. Well this garden, and this building, are now back in your service.

It’s not just that the last government relied on easy gimmicks and bad ideas. Those things happened precisely because the government itself lost its focus on the hopes and ambitions of working people. During those recent riots, I made huge asks of the police and of the criminal justice system – people already stretched to the limit. They knew I was making big asks of them. And I’m not going to apologise for it. But let me tell you this – they delivered. They deserve our gratitude. And that’s why I went to Southport, to Lambeth, and to Belfast to thank them personally. To shake the hands of the first responders who rose up to the ask I was making of them. They deserve a government that trusts them, supports them, and works with them. That is the sort of government we will be. One that works with people, not does things to them. One that believes in hard graft, not gimmicks. Honest about the challenges we face and working tirelessly to fix them. That is how we will always work.

Now, next week, parliament returns. The business of politics will resume. But it won’t be business as usual. Because we can’t go on like this anymore. Things will have to be done differently. We will do the hard work to root out 14 years of rot. Reverse a decade of decline. And fix the foundations. Between now and Christmas, we will carry on as we started. Action not words. We will introduce legislation and take decisions to protect taxpayers’ money. Take on the blockers by accelerating planning to build homes and boost growth. We’ll move forward this autumn to harness the full potential of AI for growth and the public good. We’ll bring rail services into public ownership, putting passengers first. The biggest levelling up of workers’ rights in a generation to give people security, dignity and respect at work. And Great British Energy will be owned by the taxpayer, making money for the taxpayer. Producing clean energy and creating good jobs. That is our focus for the rest of the year.

But I’ll also be honest with you. There’s a budget coming in October and it’s going to be painful. We have no other choice given the situation we’re in. So those with the broadest shoulders should bear the heavier burden. That’s why we’re cracking down on non-doms. Those who made the mess should have do their bit to clean it up. That’s why we’re strengthening the powers of the water regulator and backing tough fines on water companies that have let sewage flood our rivers, lakes and seas.

But just as when I responded to the riots – I’ll have to turn to the country and make big asks of you as well. To accept short term pain for long term good. The difficult trade-off for the genuine solution. And I know that after all you’ve been through – that is a really big ask and really difficult to hear. That is not the position we should be in. It’s not the position I want to be in. But we have to end the politics of the easy answer that solves nothing.

But I also know that we can get through this together. Because the riots didn’t just betray the sickness. They also revealed the cure. Found not in the cynical conflict of populism but in the coming together of a country. The people who got together the morning after all around the country with their brooms, their shovels, their trowels and cleared up their community. They reminded us who we really are. I felt real pride in those people who cleaned up the streets. Rebuilt the walls. Repaired the damage.

And I couldn’t help thinking about the obvious parallels. Because imagine the pride we will feel as a nation when, after the hard work of clearing up the mess is done, we have a country that we have built together. Built to last. That belongs to every single one of us. And all of us have a stake in. Our hard work rewarded – a dozen times over. Because we’ll have an economy that works for everyone.

An NHS not just back on its feet, but fit for the future. Streets that everyone feels safe in. No longer dependent on foreign dictators, because we’re producing our own clean energy right here. And giving every child – wherever they come from, whatever their background, the chance to go as far as their talents will take them. I won’t lose sight of that prize. I won’t lose sight of what we were elected to do. And most importantly, I won’t lose sight of the people we were elected to do it for. You. This is our country. Let’s fix it together.