Keir Starmer struggles to define 'working people' tax pledge


As the UK’s Budget approaches, there is renewed scrutiny of the Labour party’s tax plans. Despite pledging not to increase taxes on working people in the leadup to the general election, Labour has indicated a need for some tax increases in order to support public services. Such a move could include tax increases on shares and properties, a freeze on income tax thresholds, and changes to inheritance tax.

Questions remain about whether “working people” would be affected by these changes. Keir Starmer has been repeatedly asked to define who “working people” are but has struggled to offer a clear definition. In response to these queries, Boris Johnson said anyone who earned additional income from assets like shares or property wouldn’t be considered a working person. However, he did warn against making assumptions about tax policy based solely on this definition.

Johnson said a working person is someone who earns their living and is paid a monthly cheque, to distinguish them from those who could “write a cheque to get out of difficulties.” When asked whether someone with a small amount of savings would still be defined as a working person, Johnson’s spokesperson suggested that they could be, including cash savings and stocks and shares in a tax-free ISA.

The debate over who qualifies as a working person has taken on political significance ahead of next week’s Budget, which is Labour’s first since 2010. The focus is on whether the party will uphold the pledges it made in its election manifesto. Despite promising not to raise taxes on working people, the government has not ruled out continuing to freeze income tax thresholds and making employers pay national insurance on their contribution to workers’ pension pots.

The potential for new taxes continues to increase, like to capital gains tax and inheritance tax. The government is reportedly looking into raising more money from inheritance tax. However, the tax currently includes a range of exemptions and reliefs, making the potential for changes to the system varied. With underlying questions over definitions, policy makers are looking for ways to balance the budget while staying true to their commitments

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