UK politics latest: Keir Starmer ‘plots income tax raid’ as Reeves refuses to rule out capital gains tax rises in Budget

The Tories have warned Sir Keir Starmer is planning to hike capital gains tax and inheritance tax and a raid on pensions.

The prime minister said the nation is braced for a “painful” October Budget and claimed the country must accept “short-term pain” for “long-term good” in a speech from Downing Street.

Shadow chief secretary to the Treasury Laura Trott said: “Starmer’s speech has made it clear. Ruinous tax rises, which he’s always planned, are on the way.

“Pensions, investments, homes – nothing will be safe. And, when introduced, he will have broken his election promise to the British people.”

Experts have predicted Rachel Reeves will increase capital gains tax to align it with income tax to 45 per cent.

Ms Trott added: “Increasing tax is a political choice. One (Sir Keir) has chosen to make so he can afford inflation-busting payouts to his union paymasters.”

The Liberal Democrats have said Sir Keir Starmer’s treaty talks with German Chancellor Olaf Scholz are a “positive step forward” but called on the Government to be “more ambitious”.

Lib Dem foreign affairs spokeswoman Layla Moran MP said: “This is a positive step forward after years of the Conservatives trashing the UK’s relationship with Europe.

“But the new Government needs to be more ambitious about rebuilding stronger ties with our European allies.

“That should start with agreeing a Youth Mobility Scheme giving young people the opportunity to easily live and work across the continent.”

A UK-Germany deal on irregular migration could allow the two countries to better “deal with issues like data sharing, intelligence sharing, what we can do on joint operations”, the prime minister said.

Taking a question about immigration, Sir Keir Starmer replied: “On the wider question of irregular migration and the particular issue that we have in the UK of small boats crossing the Channel, I have long said before the election that I thought the Rwanda scheme was a gimmick, which is why we stood it down immediately.

“But nonetheless, it is very important we take back control of our borders. I have long been convinced that the best way, the most effective way to do that is to take down the gangs that are running the vile trade of putting people in dangerous situations across Europe and across the Channel.”

The Prime Minister said his “substantive discussions” with German Chancellor Olaf Scholz and proposals for a joint agreement on immigration would help the pair “deal with issues like data sharing, intelligence sharing, what we can do on joint operations, because that is the way to take effective action in relation to the vile trade that sits beneath irregular migration across Europe and in particular sits beneath the vile trade of putting people into small boats across the Channel”.

Mr Scholz had previously said, according to a translation: “The state has to contain irregular immigration so as to not overburden the country. This can and must succeed without questioning our basic law and also international treaties.”

Sir Keir Starmer has held a press conference with the German chancellor Olaf Scholz following their bilateral meeting to discuss a post-Brexit deal between both countries.

The press conference has now ended, here are the key takeaways:

• The prime minister said a new defence agreement is “at the heart” of the UK’s relationship with Germany.
• He defined the new agreement “a testament to the depth and potential of our relationship with deeper links on science, technology, development, people, business, culture, a boost to our trading relations”.
• Sir Keir insisted “we will not reverse Brexit” but he will seek closer ties with Europe.
• The PM and Mr Scholz have agreed to develop a “joint action plan to tackle illegal migration”
• He also said that “we do not have plans for a youth mobility scheme”.
• Sir Keir said he hopes the UK’s treaty with Germany will be agreed before the end of the year as he hailed a “bright new future for UK-German relations”.

Prime minister Sir Keir Starmer said he hopes the UK’s treaty with Germany will be agreed before the end of the year as he hailed a “bright new future for UK-German relations”.

Speaking at a press conference in Berlin alongside German chancellor Olaf Scholz, Sir Keir said: “As today shows, Britain can advance its interests much more effectively when we work with friends and partners.

“This treaty is part of a wider reset, grounded in a new spirit of cooperation with our shared understanding that this will be developed at pace, and that we hope to have agreed it by the end of the year.

“A Britain recollected, resetting our relationship, rediscovering our common interests, delivering for working people.

“Britain and Germany already have an incredible relationship. We invest billions in each other’s countries. Thousands and thousands of jobs are supported through trade, and every year millions of people travel between our two countries, exchanging ideas, collaborating, creating and connecting.

“But today we build on that, a bright new future for UK-German relations, two great countries brought closer together than ever before. The strongest strategic partners in Europe, and on the world stage.”

Olaf Scholz has pledged to do everything in his power to improve the relationship between the UK and the European Union.

Speaking from Berlin, he said: “We want to create good relations between the UK and the EU, it can become better day by day and we all share an interest.”

The German chancellor added that “there is reason to do everything in our power to improve relations” between Britain and the EU.

Sir Keir Starmer has promised the new UK-Germany post-Brexit agreement will bring the two countries “closer together than ever before”.

During the press confernece in Berlin, the prime minister said: “A Britain reconnected, resetting our relationship, rediscovering our common interests, delivering for working people.

“Britain and Germany already have an incredible relationship. We invest billions in each other’s countries. Thousands and thousands of jobs are supported through trade.”

The PM added: “Today we build on that. A bright new future for UK-German relations. Two great countries brought closer together than ever before.”

Sir Keir Starmer has ruled out creating a new youth mobility scheme to allow the exchange of people under 30s to work in the UK.

Asked whether the scheme will be included in the negotiations, he said: ”We want a reset with the EU, that does not mean reversing Brexit or entering the single market.

“We do not have plans for the youth mobility scheme,” he said but added the Labour government has plans to imrove the relation between the EU and the UK.

Sir Keir Starmer has said UK and German support for Ukraine will remain “unyielding”.

The prime minsiter said that the Ukrainian people were defending themselves from Russia aggression and “for all the people across Europe”.

Sir Keir pledged support for Kyiv “for as long as it takes”.

Sir Keir Starmer started his speech by praising the “fantastic hospitality of this great nation”.

The prime minister said he has discussed a new treaty between the UK and Germany to “deliver for working people” in both countries.

The PM said: “We talked about our ambition for the future and our shared determination.”

He added: “A new UK-Germany treaty, a once-in-a-generation chance to deliver for working people in the UK and Germany.”

Sir Keir said the new pact will focus on science technology, development, people, business, culture, and a boost in trading relations.

He said defence is also at “the heart” of the new agreement – with boosting the economy at the top of the agenda.