Treasury minister refuses to say whether those who rent out properties will be covered by Labour manifesto promise
Landlords and shareholders face being hit with tax rises in next week’s Budget after Sir Keir Starmer suggested that they are not “working people”.
The Prime Minister said those who earn extra income from property and investments are not covered by Labour’s manifesto pledge to protect “working people” from paying more.
His remarks – made on the sidelines of the Commonwealth heads of government meeting in Samoa – will heighten fears that he and Rachel Reeves, the Chancellor, are set to come after those with assets in the Budget on Wednesday.
Labour’s manifesto ruled out putting up rates of income tax, employee National Insurance or VAT, and said that “working people” would not pay more tax.
But there has been growing uncertainty over how No 10 defines the term, and at what point a person’s wealth means they are not covered by the manifesto pledge.
Sir Keir was asked whether “someone who works but gets their income from assets as well, such as shares and property” was a working person. He told Sky News: “Well, they wouldn’t come within my definition. I think people watching this will know whether they’re in that group or not.”
The Prime Minister said his definition covered “those people who work hard and are anxious about whether they can make ends meet, and know that should something happen to them and their family they can’t write a cheque to get out of the problem”.
No 10 later tried to play down the fears, clarifying that Sir Keir had only been talking about people who “primarily get their income from assets”.
The Prime Minister’s spokesman said: “He’s accepting that people have some savings. Those might be cash savings, or stocks and shares ISA savings or whatever. So it’s not precluding people that have a small amount of savings. Those individuals clearly are working people.”
He would not say what level of savings Sir Keir considered to be small, only that it was more than would be required by families to get out of “difficulty”.
But senior Labour figures continue to stumble over the definition of what a working person is. On Thursday, a Treasury minister refused six times to say whether landlords are working people.
James Murray, the Exchequer Secretary to the Treasury, was unable to say whether those who rent out properties would be covered by Labour’s manifesto promise.
Asked six times what a “working person” was, Mr Murray told the BBC Radio 4 Today programme: “As the Chancellor has said, working people are people who go out to work for their income.”
Asked whether landlords work, he replied: “We were very clear in the election in terms of our manifesto promises that we wanted to protect working people.”
Asked another several times, Mr Murray told Nick Robinson: “We are talking about where people get their income from and people, if they go out to work and they get their income from work, that is where we want to make sure that we protect them.”
The comments will add to further unease amongst landlords that they may be the target of a tax raid in next week’s Budget.
Before the election, Sir Keir had suggested he did not consider those who have substantial enough savings to fall back on in hard times to be working people.
His remarks come amid widespread expectation that Ms Reeves will use the Budget to increase capital gains tax on profits from the sale of shares. Landlords will face record stamp duty bills next year if the Chancellor goes ahead with unwinding property tax breaks introduced by the Tories.
Cabinet ministers have also suggested that anyone who earns more than £100,000 a year is not considered a working person, and so is not covered by the guarantee.
Ms Reeves is poised to announce sweeping tax rises next Wednesday as she seeks to plug what she says is a £22 billion “black hole” left by the Tories. The Chancellor will need to show the markets she is serious about raising revenue after announcing that she is loosening debt rules to borrow an extra £60 billion a year.
