The budget, immigration, Trump's visit: the tests lying in wait for Keir Starmer

"As Keir Starmer returns from his summer break in Europe, and Labour MPs head back to Westminster for the new parliamentary session, the government will be hoping to get on the front foot after a tumultuous few months. The recess has given ministers time to think, and to plan, but also the chance to study the polls. This week, YouGov put Labour on just 20% the lowest level in more than five years and eight points behind Nigel Farage's Reform UK."

"When Labour's former shadow chancellor Anneliese Dodds told the Guardian at the start of the summer that the Treasury should consider a wealth tax to close the growing gap in the public finances, Rachel Reeves was unequivocal. I think we've got the balance right in terms of how we tax those with the broadest shoulders, she said, citing higher levies on private jets and second homes, and increased capital gains tax, as well as scrapping non-dom status."

"Yet the chancellor is now in a trickier predicament, with experts suggesting the government spending gap is on course to reach more than 40bn after a slowdown in economic growth and higher-than-expected inflation. With extra borrowing likely to spook financial markets and ministers already struggling to stay within departmental spending limits and Reeves determined to stick to her own fiscal rules the chancellor returns to work pondering which tax rises would be the least unpalatable option."

Keir Starmer returns as Labour confronts a sharp polling decline to about 20%, trailing Reform UK while coping with internal disputes and public criticism. The government lacks momentum on major challenges such as the economy and migration. A projected fiscal gap exceeding £40bn, driven by slower growth and persistent inflation, creates pressure for revenue-raising measures. Chancellor Rachel Reeves has ruled out raising income tax, national insurance or VAT and prefers measures like higher levies on private jets and second homes, increased capital gains tax and ending non-dom status. Extra borrowing risks unsettling markets while departmental limits and fiscal rules restrict options.

Read at www.theguardian.com