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?
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When Nigel Farage’s Reform UK is just one point behind you in the opinion polls, the last thing you want to be reminded about is Brexit.
If you’re Sir Keir Starmer, that is.
No doubt Poland’s prime minister, Donald Tusk, was trying to be friendly. After all, as Sir Keir said, they share a passion for Arsenal Football Club.
But when Mr Tusk declared at their joint news conference in Warsaw that his dream was “instead of a Brexit, we will have a Breturn”, Sir Keir visibly cringed.
Was it an ambush? Not quite. But it was certainly awkward for the UK prime minister. He stood stiffly and didn’t respond, not once uttering the word “Brexit”.
Mr Tusk, however, has form for bemoaning Brexit. He was, after all, the president of the European Council when the UK voted to leave the EU in 2016.
He might now be in his second spell as Poland’s PM, but his five years at the EU make him the ultimate Brussels insider, who’s never made any attempt to hide his feelings on Brexit.
Prior to the UK referendum, in September 2015, he said Brexit “could be the beginning of the destruction of not only the EU but also of western political civilisation in its entirety”.
His most outspoken attack on the UK’s Eurosceptics came in 2019 when the-then prime minister Theresa May was struggling to get a deal. He spoke of “what the special place in hell looks like for those who promoted Brexit“.
Sir Keir also visited Ukraine on his trip to Eastern Europe. Pic: PA
Standing alongside Sir Keir, he revealed that “for obvious reasons” they discussed co-operation between the UK and the EU. He recalled that his emotional reaction to the referendum in 2016 was “I already miss you”.
He went on: “This is not just about emotions and sentiments – I am aware this is a dream of mine, that instead of a Brexit we will have a Breturn.
“Perhaps I’m labouring under an illusion. I’d rather be an optimist and harbour these dreams in my heart – sometimes they come true in politics.”
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A dream? Or a calculated move? As a Brussels insider, was Mr Tusk speaking for the EU as a whole? Was he doing Brussels’ bidding?
He may have returned to lead his homeland, but he remains a key player in Brussels.
On becoming Poland’s PM in 2023, he ended a dispute with Brussels which unlocked billions of frozen EU funds for his country.
He also orchestrated the return of his centre-right ally Ursula von der Leyen as European Commission president.
And Poland has just taken over the rotating presidency of the EU, which means Mr Tusk will be hugely influential once again, chairing meetings and setting agendas.
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Poland is back in the European mainstream. It’s where Mr Tusk would like the UK to be as well.
It’s where, privately, Sir Keir would like the UK to be. It’s just that with Reform UK almost neck and neck with Labour in the polls, he daren’t say so.
Poland’s prime minister has said he hopes for the “Breturn” of the UK as a member of the European Union – as he discussed a defence treaty with Sir Keir Starmer.
Donald Tusk, who was hosting the prime minister for discussions on a UK-Polish defence pact in Warsaw, said it was his “dream” that “instead of a Brexit, we will have a Breturn”.
Standing alongside Sir Keir at a joint news conference, the Polish premier also said he had discussed greater cooperation between the UK and the EU.
Mr Tusk, who was the president of the European Council during the years that Britain left the EU, said: “For obvious reasons, we also discussed another issue, the cooperation between Great Britain and the European Union.
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“I’m sure you will recall when we learned about the results of the Brexit referendum. I was head of the European Council… at that time. My first emotional reaction was to say: ‘I already miss you.’
“I remember our press briefings as if it was yesterday. I already miss you, that’s what I said.”
He added: “This is not just about emotions and sentiments – I am aware this is a dream of mine, that instead of a Brexit we will have a Breturn.
“Perhaps I’m labouring under an illusion. I’d rather be an optimist and harbour these dreams in my heart – sometimes they come true in politics.”
Sir Keir, who held the role of shadow Brexit secretary while Labour was in opposition and backed remain in the 2016 referendum, has repeatedly ruled out rejoining the customs union or single market.
He has, however, said he wants to deepen post-Brexit ties with Brussels
Mr Tusk was speaking after Sir Keir travelled to Poland to discuss a defence pact with the NATO ally – which Mr Tusk said he hoped would be ratified “this year”.
The new treaty is designed to protect Europe from Russian aggression, tackle people-smuggling gangs, and combat misinformation and cyber threats.
Sir Keir was also asked whether the UK’s attendance at a defence summit in Poland earlier this week meant he was in favour of “creating an army” for Europe – to which he replied he was not.
Asked about the E5 defence ministers meeting in Warsaw and whether he supported creating a common European army, Sir Keir said: “The meeting that happened the other day is vitally important. That isn’t about creating armies.
“It’s about how we share our security concerns and build on what we’ve already got.”
Sir Keir Starmer and his wife Victoria Starmer visit the Memorial And Museum Auschwitz-Birkenau. Pic: Reuters
As part of the defence pact, a £4bn partnership for new air defence systems in Poland has been agreed. The project will be headquartered in Bristol.
“The UK has secured £8bn of defence deals in Poland over the last three years alone, and we’re going further today, opening a new joint programme office in Bristol to deliver our £4bn partnership, to deliver the next generation of air defence systems to Poland,” he said.
He added: “We share an unbreakable commitment to NATO and an unbreakable commitment to Ukraine.”
During his visit to Poland, Sir Keir also made his first visit to Auschwitz, which he described as “utterly harrowing”.
The prime minister visited the former Nazi concentration camp, where he laid a wreath ahead of the 80th anniversary of its liberation.
After he and his wife Victoria, who is Jewish, visited the site, Sir Keir said: “Nothing could prepare me for the sheer horror of what I have seen in this place. It is utterly harrowing.
“The mounds of hair, the shoes, the suitcases, the names and details, everything that was so meticulously kept, except for human life.”
Sir Keir Starmer and his wife Victoria Starmer visit the Memorial And Museum Auschwitz-Birkenau. Pic: Reuters
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His visit to Poland came following a surprise trip to Kyiv on Thursday, where he reiterated his support for Ukraine and suggested that British troops could be deployed to the country as part of peacekeeping efforts.
In an exclusive interview with Sky News’ political editor Beth Rigby, Sir Keir said the UK would play its “full part” in any peace negotiations – including by deploying British troops for peacekeeping – though added that he did not want “to get ahead of ourselves”.
During his visit, Sir Keir also met Polish businesses, including the firm InPost which has announced it will invest a further £600m into the UK in the next five years to grow its operations.
It is thought that the overall £1bn investment by the firm, which operates parcel lockers, could support up to 12,000 new jobs.
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