Keir Starmer is ‘a working person’ so could be shielded from tax rises, chancellor admits

Prime minister gets his income from going out to work, says Rachel Reeves, as Budget tax hikes feared for non-workers

The prime minister is set to be among those people protected from tax rises in next week’s Budget, the chancellor has suggested.

Asked whether Sir Keir Starmer was defined as a working person, Rachel Reeves said: “The prime minister gets his income from going out to work and working for our country.”

Before the election, Labour pledged not to raise taxes for working people, and ministers have come under increasing pressure to define the term.

But Sir Keir prompted anger by suggesting people whose income is primarily from stocks and shares were not “working people”.

People from unpaid carers to landlords have objected, saying what they do is vital for others and they would object to facing tax rises.

Asked on LBC radio whether Sir Keir was a worker, Ms Reeves said: “He’s a working person.”

Earlier this month, the PM was forced to pay back more than £6,000 worth of gifts and hospitality he received since entering No 10 after a row over ministerial donations.

Ms Reeves added: “In this budget, we made a clear commitment in our manifesto not to increase the key taxes that working people pay: national insurance, income tax and VAT, and despite the difficult circumstances and unfunded commitments of the previous government, I’m determined to stick to that manifesto commitment in the Budget next Wednesday.”

The prime minister’s comment has heightened expectations of a hike in capital gains tax. Inheritance tax and fuel duty are also said to be in line for hikes.

Ms Reeves is looking to bridge what she calls a “£22 billion black hole” in the public finances.

Downing Street was forced to backtrack after initially suggesting those with even a small income from stocks and shares would face higher taxes.

Tom Selby, director of public policy at investment firm AJ Bell, told The Independent: “The government’s commitment not to raise taxes on ‘working people’ was always going to come unstuck because the definition is potentially so broad.

“While raising the rate of capital gains tax will undoubtedly affect many working people and reduce the rewards for investing – potentially undermining the government’s wider ambition to drive economic growth – the chancellor will argue it is broadly wealthier people who will shoulder the burden.”