A minister left open the door to big tax hikes in the Budget on people on more than £100,000 as he refused to say these high earners were “working people” under Labour’s definition.
Sir Keir Starmer ruled out increases to the rates of income tax, VAT and National Insurance in Labour’s manifesto, and appeared to further caveat this so it only applied to “working people”.
The document states: “We will ensure taxes on working people are kept as low as possible. Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.”
But it is not clear what Labour’s definition is of “working people”, with Sir Keir having previously suggested that one of the criteria is that people have no savings.
He stressed before the July 4 general election that his view of working people was: “People who earn their living, rely on our [public] services and don’t really have the ability to write a cheque when they get into trouble.”
Care minister Stephen Kinnock was repeatedly asked on Sky News whether people who earned more than £100,000 a year are “working people” under Labour’s definition and refused several times to answer.
He insisted he would not be drawn on Budget speculation.
But pressed whether earners on six figures were “working people”, he said: “We made it absolutely clear that we won’t be raising taxes on working people, that means VAT, National Insurance and income tax.”
However, presenter Kay Burley interjected: “Even if you earn more than £100,000.”
Mr Kinnock insisted: “We will not be breaking any of those manifesto commitments.”
But asked again to clarify in his opinion whether people on more than £100,000 came under Labour’s definition of “working people,” he responded: “The Chancellor will set this out on the 30th of October..it’s absolutely clear in our manifesto..the definitions have to be seen in the round.”
But asked again if people were “working”, no matter their salary, he added: “It just would not be appropriate for me to speculate on what the Chancellor is going to put in the Budget.”
He dodged the question three more times on his definition of a “working person”.
His stance will fuel concerns that London could be hard hit by the Budget, where salaries are higher than other regions but so is the cost of living, especially house and renting prices.
Mr Kinnock faced the grilling after Health Secretary Wes Streeting stressed on Sunday that the focus of the Budget was not on the impact on people on six-figure salaries.
While accepting that the well-paid were “working people”, the Cabinet minister, who earns £159,000 as an MP and cabinet minister, told Sunday Morning with Trevor Phillips on Sky News: “I am not worried about me, I am not worried about you, but I am worried about people who are struggling to make ends meet at the moment.
“I’m thinking about people like my mum, who’s a cleaner, or my dad, who’s a car salesman. People who are on lower or middle income who get towards the end of the month and find they’ve got more month left than they have the money.”
Ms Reeves is expected in the Budget to raise National Insurance for employers, despite claims the move would break Labour’s manifesto which the party denies, and to continue stealth taxes with the freeze on thresholds for paying income tax, going on for another two years beyond 2027/28.
She is also set to axe some reliefs in the inheritance tax system, may decide not to continue a more generous stamp duty scheme, and could keep council tax rising at five per cent a year.
Capital gains tax is expected to increase to 33 per cent or above but not go as high as 39 per cent.
Fuel duty could be increased for the first time in 14 years, by not renewing the so-called “temporary” 5p cut in it.
Labour has pledged to cap corporation tax at the current level of 25 per cent, but it could still tweak this levy to raise more revenue.
At least £3 billion of cuts to benefits are expected to be announced, with stricter eligibility restrictions in the pipeline, to stop the welfare bill spiralling so high.
