Sir Keir Starmer has said that people who get additional income from shares or other assets on top of working a full time job do not count as ‘working people’.
Starmer’s comments come as his government continues to rule out any tax rises on those that it considers working people, which many people have assumed to mean income tax, VAT and employee National Insurance Contributions (NICs).
Asked in an interview with Sky News whether someone who works but also receives an income from shares or property constitutes as a working person, the Prime Minister told Beth Rigby: “They wouldn’t come within my definition.”
But the phrase that has also been criticised for its vagueness and disproportionately targeting investors.
Speaking to Sky’s Beth Rigby, the Prime Minister said: “I would define a working person as somebody who goes out and earns their living, usually paid in a monthly cheque. But I think that’s obviously very broad so let me be clear: what I mean are… the sorts of people who go out, work hard and maybe save a bit of money but don’t have the wherewithal to write a cheque to get out of difficulties if they and their family get into difficulties.”
The comments will be viewed by some as being at odds with the government’s previous commitment to make wealth creation and growth its “number one priority” in the run-up to the next week’s Budget.
Reacting to the comments, Neil Wilson, chief market analyst at the trading platform Finalto, said: “Keir Starmer thinks owners of shares don’t count as ‘working people’. Just give up and go home now, the revolution is going to be televised next Wednesday. No wonder we are so poor relative to our US cousins.”
Starmer’s definition of working people is a hint that heavily trailed rumours of hikes to taxes on assets and savings at the Budget could prove to be correct.
The Prime Minister and other senior ministers have continuously declined opportunities to rule out a hike to capital gains tax (CGT), though Starmer did pour cold water on reports suggesting it could be raised to as much as 39 per cent.
It also looks highly likely that Rachel Reeves will apply National Insurance on employers’ pensions contributions, in a move that business leaders have warned will be difficult for firms and workers in the private sector.
In a partial climbdown on Sir Keir’s position, Downing Street later clarified that people who hold a small amount of savings in stocks and shares still count as working people.
The Prime Minister’s official spokesman said Sir Keir meant someone who primarily gets their income from assets in his interview.
On Friday morning, a Treasury minister said it is “important to focus on” where people are getting their money from in relation to the debate over the “working people” definition.
James Murray told Sky News that “a working person is someone who goes out to work and who gets their income from work”.