Keir Starmer provides main trace about Budget tax rises for folks in a single key group

Keir Starmer has signalled he could hike taxes on people who get their money from property and shares.

The PM dropped a major hint that capital gains tax – which is levied on the sale of assets – could rise in next week’s Budget. Asked if someone who works but gets income from shares and property was a working person, Mr Starmer said: “Well they wouldn’t come within my definition.”

Labour vowed not to raise taxes on working people like VAT, national insurance and income tax, a promise the PM and Chancellor Rachel Reeves have insisted they’ll keep. But there has been rampant speculation that Ms Reeves is plotting tax hikes elsewhere to tackle the £22billion black hole the Tories left in the public finances.

The Chancellor is thought to be mulling up to £40billion in tax rises and spending cuts to fix the black hole and protect struggling public services from another round of austerity.

Mr Starmer refused to be drawn on whether taxes would go up as he spoke to reporters at a Commonwealth summit in Samoa. He said: “We’re going to have to make difficult decisions in the Budget.”

Asked if he would define himself as a working person, he said: “I would define a working person as somebody goes out and earns their living, usually paid in a monthly cheque.”

He added: “Who I have in my mind’s eye when I make decisions as prime minister are the sorts of working people who go out, work hard, and maybe save a bit of money but don’t have the wherewithal to write a check to get out of difficulties if they or their family get into difficulties.

“Now that’s perhaps who I have in my mind’s eye. People who’ve got that anxiety, if you like, in the bottom of their stomach that says, ‘we’re doing all right but should something happen to me and my family, they haven’t actually got the wherewithal to get out of that problem.’”