Keir Starmer has been accused of misleading the public regarding tax increases in the Budget after suggesting that “working people” do not earn money from property or shares. The prime minister has also denied allegations that he is targeting middle Britain.
Labour had promised in their manifesto not to raise taxes on what they referred to as “working people,” specifically ruling out increases in VAT, national insurance, and income tax. However, Chancellor Rachel Reeves is now expected to raise national insurance for employers, rather than employees, a move that Labour insiders believe does not violate any promises.
Sir Keir’s statements about working people have raised concerns about potential tax hikes, despite Downing Street later clarifying that individuals with small savings in stocks and shares are still considered “working people.” The Prime Minister explained that by “working people,” he meant those who primarily earn income from assets.
Among the taxes that could see increases are capital gains tax, inheritance tax, and fuel duty. Rachel Reeves is aiming to raise £40 billion through tax hikes and spending cuts to prevent a return to austerity in the upcoming Budget.
During a press conference at the Commonwealth Heads of Government Meeting in Samoa, Prime Minister Starmer emphasized the need to address the existing financial challenges and the £22 billion deficit. He reiterated that the government was clear about the necessary tax increases outlined in their manifesto and campaign, while also promising not to raise taxes on working people, as defined in terms of income tax, NICs, and VAT.
As the Budget approaches, the government is under pressure to deliver on its promises while also tackling the financial challenges facing the country. The debate over tax increases and their impact on different segments of the population continues to be a key issue that will shape the economic landscape in the coming months.
