By james art The Prime Minister has rejected claims he is waging a “war on Middle Britain” amid speculation he could increase the burden on those on asset income.
Labor has promised in its manifesto not to increase taxes on what it describes as “working people”, expressly excluding increases in VAT, National Insurance and Income Tax.
But asked to define the term during an interview in Samoa, Sir Keir said it was someone who “goes out and makes a living, usually paid in something like a monthly cheque” and who can’t “write a check to get out of trouble.” .
At a press conference at the end of the Commonwealth Heads of Government (Chogm) meeting in Samoa on Saturday, the Prime Minister was asked if he was “making war on Middle Britain”.
“No. Let me get this straight,” he said.
“What we’re doing is two things in the budget.
“The first is fixing the fundamentals, which is about the legacy we have, including the £22 billion black hole. We have to deal with it.
“In the past, leaders have sidestepped these issues, created fictions, and I’m not prepared to do that.”
Asked if he had misled the public in Labour’s manifesto, the Prime Minister said: “No, we’ve been very clear about the tax increases we’re going to have to make regardless of the circumstances and you listed them there and I listed them I don’t know how many times in the campaign.
“We’ve been equally clear in the manifesto and in the campaign that we’re not going to increase tax on working people, and we’ve made it clear what we mean by that in terms of income tax, in terms of NIC and in terms of VAT, and we intend to keep the promises we made we did in our manifesto.
It comes after the Prime Minister told Sky News that he does not consider people with income from assets such as property shares to be working people, paving the way for potential tax increases.
“They wouldn’t fall under my definition,” he said.
In a partial departure from Sir Keir’s position, Downing Street clarified on Friday that those who hold a small amount of savings in stocks and shares still count as working people.
Number 10 said that in his interview Sir Keir was referring to someone who mainly gets his income from assets.
Landlords reacted angrily to his remarks, accusing the government of “fostering misconceptions” about them.
“It’s just not true that landlords aren’t working people,” said Ben Beadle, CEO of the National Association of Landlords.
“Instead of fueling misconceptions, the Government should focus on the main challenge in the rental market, which is the lack of rental housing to meet ever-increasing demand.”
Ministers resisted going into the details of next week’s budget, but sources said she would seek to find £40bn in tax rises and spending cuts to avoid a return to austerity in next fiscal statement Wednesday.
Capital gains tax, inheritance tax and fuel tax are among some of the levers Chancellor Rachel Reeves could use to raise revenue as she seeks to put the economy on a stronger footing.
It is also expected to raise employer national insurance by up to two percentage points and lower the income threshold at which employers pay contributions – measures that will raise around £20 billion in total, as first reported by the Times.
Ms Reeves admitted she would raise some taxes, pointing to a £22bn black hole in the public finances which she said she discovered had been left behind by her Tory predecessors after she took office, but did not specify which ones.
In an interview with LBC on Friday night, the chancellor said he would avoid increasing “the key taxes that working people pay – national insurance, general income tax and VAT”.
Her opponent, Jeremy Hunt, said raising employers’ NICs would amount to a “tax on jobs” that would “harm business” and break Labour’s manifesto promise.
The shadow chancellor said: “Rising employers’ NICs is a tax on jobs paid by working people. Not only will this hurt business, but it will also mean fewer jobs and lower wages.
The budget will be presented on October 30.