- Are you a working person with shares or a second property? Email mark.duell@mailonline.co.uk
Keir Starmer has been accused of ‘straight up lying’ to Brits as shareholders, landlords and savers face being battered with tax rises at next week’s Budget.
The PM fuelled alarm at the looming raids by Rachel Reeves as he suggested those with assets do not count as ‘working people’ and will by targeted by Labour.
The Chancellor is expected to impose the biggest tax hikes in three decades on Wednesday, raising around £35billion extra to take the burden on Brits to a record high.
But Sir Keir has been under pressure to set out what a ‘working person’ is after Labour’s manifesto said they would be shielded from increases.
He has already ruled out putting up rates of income tax, employee National Insurance and VAT, leaving Ms Reeves scrambling to target areas such as capital gains and inheritance tax for revenue.
In an interview with Sky News at the Commonwealth summit in Samoa, Sir Keir said a working person is somebody who ‘goes out and earns their living, usually paid in a sort of monthly cheque’ but they did not have the ability to ‘write a cheque to get out of difficulties’.
And when asked if this would include people who get all or part of their income from assets, he said: ‘Well, they wouldn’t come within my definition.’
Although No10 scrambled to clarify that people with small savings did count as working people, Tories accused the premier of changing his tune after winning the election.
‘Keir Starmer went into an election saying he’d protect working people only to define that as a subset of people with jobs once he won,’ Tory frontbencher Claire Coutinho posted on X.
‘Labour either had no plan for post election or straight up lied to the public on multiple fronts (£300, winter fuel, working people…)’
Other critics pointed out that many people had shares in the companies they worked for, or might have invested in second homes for their pension.
Prime Minister Sir Keir Starmer during a TV interview at the Commonwealth Heads of Government Meeting in Samoa on October 24
Chancellor Rachel Reeves on a visit to Washington DC yesterday
Tory frontbencher Claire Coutinho said it was clear that Labour ‘straight up lied to the public on multiple fronts’ before the election
Reform MP Lee Anderson also voiced anger at the comments from Sir Keir
Downing Street later insisted people who hold a small amount of savings in stocks and shares still count as ‘working’.
The PM’s official spokesman said Sir Keir had been referring to Brits who primarily get their income from assets.
Asked at another briefing whether people with stocks and shares are classed as ‘working people’, the PM’s deputy spokeswman said: ‘The point that the Prime Minister was making in his interviews yesterday is that it is those who cannot always write a cheque who are the hardest hit by economic shocks – and that’s why it’s vital that we restore economic stability and that’s what you’ll see set out in terms of the approach at the Budget next week.’
The spokeswoman added: ‘He was speaking about who is at the forefront of his mind’s eye in terms of the priorities and the decisions that the Government takes when it comes to economic stability.’
Sir Keir’s comments come amid widespread expectation that the Chancellor will increase capital gains tax on profits from the selling of shares.
She is also understood to be planning to impose national insurance on employers’ contributions to retirement funds – despite complaints it is a ‘straightforward breach’ of Labour’s manifesto.
That burden will seemingly be borne entirely by the private sector, with Ms Reeves pumping an extra £5billion into NHS and other budgets to avoid cuts to headcount or wages.
Labour former home secretary Lord Blunkett gave a stark warning today that will hammer already-stretched retirement savings.
The rumoured £35billion of tax increases in the package would be the most raised at a Budget since 1993.
It would take the tax burden to a new peak since comparable records began in 1948 – and it is not thought to have been higher before that.
However, Sir Keir has insisted there is ‘no reason’ for entrepreneurs to leave the country.
He said: ‘My evidence that what we are saying is attractive to investors is last Monday’s investment summit that was hugely successful.
‘All the feedback back to us has been that it was very well received by a significant number of global investors.’
Sir Keir insisted people were investing in Britain ‘because of what this government is bringing to the table’.
Keir Starmer (pictured in Apia, Samoa) insisted next week’s fiscal package would ‘rebuild’ services and the economy
Sir Keir has made clear the Budget revenue-raising will go beyond the claimed £22billion ‘black hole’ left by the Tories.
Hundreds of thousands could be dragged deeper into the tax system by extending the freeze on thresholds again. And inheritance tax, pension pots and capital gains could also be milked to bolster the government’s books.
Official figures suggest it would be the most tax raised at a Budget since 1993, in the aftermath of the Black Wednesday Sterling crisis.
And Ms Reeves could put the country on track to pay the highest tax as a proportion of GDP since comparable records began nearly eight decades ago.
Downing Street said investors ‘shouldn’t be worried about this Budget’, despite some rushing to sell assets due to expected hikes in capital gains tax.
Attending IMF meetings in Washington DC yesterday, Ms Reeves confirmed that she is bending fiscal rules to splurge billions more on infrastructure.
The government will switch to a debt measure based on liabilities – which should allow around £50billion more borrowing for projects such as running HS2 to Euston.
However, critics warned that she was ‘fiddling’ the figures – while nervous markets continue to crank up the costs of servicing government debt.
Goldman Sachs has predicted that Ms Reeves will only use around £25billion of the extra headroom to avoid a Liz Truss-style meltdown on the markets.
Touring broadcast studios this morning, Treasury minister James Murray told Sky News that ‘a working person is someone who goes out to work and who gets their income from work’.
Pushed further on whether a working person could also get income from shares or property, Mr Murray added: ‘We’re talking about where people get their money from, and so working people get their money from going out to work.
‘And it’s that money that we’re talking about in terms of those commitments we made around income tax, around national insurance.
‘That’s what’s important to focus on, where people are getting their money from, getting their money from going out to work.’
Sir Keir has said the Budget will aim to ‘fix the foundations’ and ‘rebuild’ the country as he insisted that the ‘£22billion black hole’ is ‘for real’ and not ‘performative’.
‘It’s for real and we’ve got to deal with it and I don’t think we are wrong to be honest about that and we have also been clear this is a budget about rebuilding the country and therefore it will also spell out the direction of travel for the country and what we want to do with it.
‘We’ve got to get both bits of that right.’
The PM said he was ‘not prepared’ to put off the pain for another year, telling reporters that while there would be more budgets to come, he wanted to ‘tackle the inheritance in this Budget’.
‘I’m not prepared to walk past it. I’m not prepared to put it off and that is a signal of the way I want to do business which is not to pretend our problems aren’t there, it’s to actually roll up our sleeves and deal with it.’