Sir Keir Starmer has given us an idea of who he wants to protect in the budget – but is Rachel Reeves on the same page?
Who counts as a working person will matter a lot next week when the new Labour government unveils what is being billed as a historic budget.
Sir Keir Starmer used the phrase “working people” repeatedly in the general election as he sought to reassure voters he wasn’t going to raise their taxes.
But as this bumper budget comes around, it’s clear that someone’s taxes are going to go up, despite the prime minister repeatedly refusing to acknowledge this in our interview at the Commonwealth leaders summit in Samoa on Thursday. The closest he got was telling me “we’re not going back to austerity” which means no to big spending cuts.
Treasury insiders tell me that the government has to find £40bn to plug gaps in the public finances, and that means tax rises and spending cuts are on the way.
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So taxes are going up, and there are a couple of supplementary questions to this: Who is going to be hit by tax rises?
And, given pretty much all of us with a job might count ourselves as “working people”, are lots of you going to feel let down by the new Labour government should you find yourselves caught in tax rises?
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PM questioned on tax rises
On Thursday, I did get a more contoured definition of who the prime minister really means when he talks about working people.
For a start, he was clear to me that someone who gets their income from assets, such as shares and property, as well as work, wouldn’t come within” Sir Keir’s definition of a working person.
This is a strong hit that rises in capital gains taxes could be on the way and also leans to a bigger point that Sir Keir thinks the wealthy – workers or not – should pay more tax.
Working people are, in his “mind’s eye”, the people who have 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 though maybe [I’ve] got a bit of savings”.
“They are the people that, in a way, I came into politics to try and make sure they had secure jobs and didn’t have the anxiety of public services not working, and felt genuinely better off with better opportunities. That’s who I have in my mind’s eye.”
Who might those people be?
Is it a “white van man” hoping that fuel duty won’t go up, or a nurse worried that her council tax could go up?
Is it the millions of workers on the basic rate of income tax that could find themselves dragged into higher tax bands should the chancellor decide to extend the Conservatives’ freezing of tax bands?
The chancellor could raise £7bn a year from that if she extends that beyond 2028. But if she does that on Wednesday, millions of those workers in Sir Keir’s “mind’s eye” might feel let down by this government.
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In the election, it helped the prime minister to have a broad definition of a working person because it meant he could talk to lots of groups of voters.
But now, as we get to the nuts and bolts of who is going to shoulder the burden of plugging gaps in the public finances, the “difficult decisions” as he puts it, are going to bite.
We do now have, at least, a better sense of who he wants to protect in this budget from tax rises. But will his chancellor follow through?
Crystal Palace are celebrating a historic win in the FA Cup after a 1-0 victory against Manchester City at Wembley.
It’s the south London club’s first major trophy – and third time lucky after losing two previous finals they have played in. The win also means Palace have qualified for next season’s Europa League.
Eberechi Eze put his side 1-0 up with the game’s only goal in the 16th minute.
Man City were given a chance to equalise when they were awarded a penalty in the 33rd minute, but Palace goalkeeper Dean Henderson – who had earlier escaped a red card for a handball outside the box – saved Omar Marmoush’s spot kick.
Crystal Palace’s Eberechi Eze scores. Pic: PA
Man City’s Omar Marmoush after his penalty was saved. Pic: PA
It briefly seemed the south London team had gone 2-0 up after a 58th-minute strike from Daniel Munoz but the goal was quickly ruled offside.
They then held onto their 1-0 lead until the final whistle, which came after an agonising 10 minutes of injury time.
Dean Henderson dodged a red card and saved a penalty. Pic: PA
Oliver Glasner’s team were the underdogs despite Manchester City having had a difficult season in the Premier League.
Pep Guardiola’s side also lost to their neighbours and rivals Manchester United in last year’s cup final.
‘It’s all about spirit’
Palace goalscorer Eze said he had “no words” as he celebrated with his team mates.
Eze celebrates after the final whistle. Pic: PA
“I can only thank God,” he told ITV. “This is special, this is what dreams are made of, for this club as well. Who would have thought we could do it?
“We’ve made history today. The tactics were good but it’s all about spirit. That’s energy, that’s everyone fighting together and doing what we had to do today.”
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