You're not 'working people', Keir Starmer tells landlords and shareholders as he prepares for his tax grab ahead of next week's Budget

By: dailymail Posted On: October 25, 2024 View: 123

By James Tapsfield, Political Editor For Mailonline and Olivia Christie

Published: 18:50 EDT, 24 October 2024 | Updated: 03:59 EDT, 25 October 2024

Landlords and shareholders face being hit with tax rises at next week's Budget after Sir Keir Starmer suggested they are not 'working people'.

The PM fuelled alarm at the looming raids by Rachel Reeves as he suggested those with assets 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.'

Prime Minister Sir Keir Starmer during a TV interview at the Commonwealth Heads of Government Meeting in Samoa on October 24

Chancellor Rachel Reeves seen outside Downing Street on October 22

Downing Street later tried to quell a backlash at the premier's remarks, insisting 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.

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.

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

Downing Street later said investors 'shouldn't be worried about this Budget', despite some rushing to sell assets due to expected hikes in capital gains tax.

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.'

What the PM said on 'working people' and tax

In an interview with Sky News in Samoa, Keir Starmer was pushed on his manifesto pledge to protect 'working people' from tax rises and how he defined them.

'For working people we made an absolute commitment that their income tax wouldn't go up, their NI wouldn't go up, their VAT wouldn't go up.

'I said that in the campaign, we're going to keep to those promises. We are going to have to make difficult decisions in this budget, I'm not going to preempt the budget you know that.

'But what we are going to do, it's really important that we fix the foundations, that we clear up this mess once and for all and on that we build a better Britain.

'That will be measured in people feeling better off, in the NHS not just back on its feet but fit for the future and public services working in the way that people can expect to see from their public services.

'I would define a working person who goes out and earns their living, usually in a monthly cheque, but that's obviously very broad so let me be clear.

'What I mean, who I have in my mind's eye when I'm making the 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 cheque to get out of difficulties if they or their family get into difficulties.

'People who have got that anxiety if you like in the bottom of their stomach that says, we're doing it all right, but if something were to happen to me or my family I don't have the wherewithal to get out of it.

'When I tell you who's in my mind's eye, I think everyone watching will know whether they are in that category because you carry in that situation a sort of knot in the bottom of the stomach which if push comes to shove and something happens to me and my family I can't just get a cheque book out, even if I have savings.

'They are the sort of people I came into politics for to try and make sure tehy had secure jobs, and didn't have the anxiety of public services not working, to make them feel like they have better opportuniteis... that's who I had in my mind's eye.'

'Pressed on whether that covered people who work but also get money from assets such as property and shares, Sir Keir said: 'They wouldn't meet my definition, but you can probably give me any number of examples, you're adding a second questions to the first which is you're asking me for a definition of a working person and then making assumptions about what kind of taxes could go up.

'You could go through that exercise or you could ensure working people hear from me... people watching this will know whether they are in that group or not, people who work hard, who are anxious to make ends meet, and who know that if something happens to them or their family, they can't just write a cheque book.

'I am really concerned about them, politics for me is who do you have in your mind's eye when you make those decisions, I'm not ideological.

'I made clear promises in the election campaign and I intend to keep those promises, so let me be very clear about that.'