Sir Keir Starmer has denied misleading the public in the general election after hinting at tax rises for those who own shares and assets.
Labour’s election-winning manifesto promised it would not “increase taxes on working people” – but it was not made clear who exactly who is considered a “working person”.
Asked by Sky News’ political editor Beth Rigby last week whether he would classify a working person as someone whose income derived from assets such as shares or property, the prime minister said: “Well, they wouldn’t come within my definition.”
It has led some critics to accuse the prime minister of targeting the middle class ahead of Chancellor Rachel Reeves’ budget next week through potential hikes to capital gains tax, national insurance raised for employers, or inheritance tax.
Image: Chancellor Rachel Reeves will deliver her budget on Wednesday
Quizzed by Rigby at a news conference in Samoa for the Commonwealth summit on Saturday, Sir Keir denied “plotting a war against middle Britain”.
“What we’re doing is two things in the budget,” he said.
“The first is fixing the foundations, which is dealing with the inheritance that we’ve got, including the £22bn black hole.”
The prime minister was referencing Ms Reeves’ repeated claim that the Conservatives left the new government with a £22bn shortfall, requiring them to make “tough decisions”.
“In the past, the last 14 years, leaders have walked past those problems, created fictions and I’m not prepared to do that,” he added.
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“And having fixed the foundations, we’re going to rebuild our country.”
He said doing so entailed “a very clear plan” to ensure people across the UK “are better off”, that their “living standards go up” and to ensure people have the public services they are “entitled to and deserve”.
He said part of the last pledge was to “make sure that our NHS is not just back on its feet, but fit for the future”.
Asked if he had misled the public during his campaign by not revealing there would be significant tax rises in Labour’s first budget, Sir Keir said: “No – we were very clear about the tax rises that we would necessarily have to make up.
“We were really clear in the manifesto and in the campaign that we wouldn’t be increasing taxes on working people and spelt out what we meant by that in terms of income tax, in terms of NICs [national insurance contributions] and in terms of VAT, and we intend to keep the promises that we made in our manifesto.”
Sir Keir and Ms Reeves have both regularly warned the public that Labour’s first budget in 14 years will be “painful” and include “tough decisions” – rhetoric the prime minister repeated on Saturday.
Rigby has predicted taxes will be going up beyond what the prime minister said in the Labour manifesto.
But after interviewing him this week, a Number 10 spokesperson clarified that those with a small amount of savings in stocks, shares or an ISA are still considered by the prime minister to be a “working person”.
Rather, Sir Keir was talking about people who “primarily get their income from assets,” they said.
Rigby said: “What does it all mean? Well, I think that it could be that raises in capital gains tax are on the cards now.”
The budget is set to take place at 12.30pm on Wednesday 30 October.
“Division and hate are on the rise. Discontent and disillusionment widespread.” What she meant: The Labour government has been a huge disappointment.
“The desire for change is impatient and palpable.” What she meant: You’ve had 16 months to deliver change – voters are saying, “Get on with it”.
“We have to offer hope, to offer the big change the country’s crying out for.” What she meant: Stop tinkering. Get more radical. You’ve got a huge Commons majority, after all.
“We must give a stronger sense of purpose, whose side we’re on and of our Labour values and beliefs.” What she meant: We’re not doing enough for working people or tackling inequality.
“People feel that this government is not being bold enough in delivering the kind of change we promised.” What she meant: Our voters are deserting us because they don’t see change.
“I’ll be a champion for all Labour values and boldness in everything we do.” What she meant: Watch out! I’m going to hound you and hold your feet to the fire!
“We won’t win by trying to out-Reform Reform, but by building a broad progressive consensus.” What she meant: Stop the lurch to the Right on immigration. We’re better than that.
“It starts with wrestling back the political megaphone and setting the agenda more strongly.” What she meant: We need to sharpen up our communication and selling our message.
“We’ve let Farage and his ilk run away with it.” What she meant: The Reform UK leader is running rings round us in communicating and campaigning. We’re too sluggish and flat-footed.
“For too long the country and the economy has worked in the interests of the few and not the many.” What she meant: Winter fuel payment cuts were a disaster and the two-child benefit cap has to go.
“Trickle down economics hasn’t worked.” What she meant: No more tax cuts for the rich. It’s time for a wealth tax, for example, to redistribute wealth.
“Life has just got harder and harder, less and less secure in work, in housing, in making ends meet.” What she meant: We’re failing to tackle the cost of living crisis and housing shortages.
“The deep-seated inequalities that have widened in wealth in regions in class in health need fundamentally redressing.” What she meant: We’re failing to look after our “red wall” voters.
“Re-unite our voter coalition and re-unite the country.” What she meant: Start governing for everyone, urban and rural, rich and poor, North and South. Stop neglecting poorer regions.
“We need to step up.” What she meant: For goodness sake, sort out the chaos in 10 Downing. Stop blaming aides and civil servants and sacking them. Get a grip!
Members and affiliates “don’t feel part of the conversation or party of the movement right now. And we have to change that.” What she meant: Stop ignoring and alienating activists, MPs and unions.
“Unity and loyalty comes from collective purpose, not from command and control.” What she meant: Stop the control freakery in parliament and party management. It’ll backfire.
“Debating, listening and hearing is not dissent. It’s all strength.” What she meant: Listen to your backbenchers and stop suspending them when they vote against policies like welfare cuts.
“As your deputy, my commitment is to change the culture.” What she meant: I’m going to stand up for rebels and critics and force you to ditch the control freakery and bad decisions.
“At the election 16 months ago the British people voted for change. I’m here to do everything I can to make that change a reality.” What she meant: Raise your game, or else!
She said it all with a smile, but there was menace there.
As deputy leader, Lucy Powell was always going to be a critical friend. So there you go, prime minister. Here’s 20 things you need to do for her to be more friend than critic.