Analysis: PM has given a more contoured definition of working people – but the difficult decisions will bite
Who counts as a working person will matter a lot next week when the new Labour government unveils what is being billed as an historic budget.
Sir Keir Starmer used the phrase “working people” repeatedly in the general election as he sought to reassure voters he wasn’t going to raise their taxes.
But as this bumper budget comes around, it’s clear that someone’s taxes are going to go up, despite the PM repeatedly refusing to acknowledge this in our interview at the Commonwealth leaders summit in Samoa.
The closest he got was telling me “we’re not going back to austerity”, which means no to big spending cuts.
Treasury insiders tell me that the government has to find £40bn to plug gaps in the public finances, and that means tax rises and spending cuts are on the way.
So taxes are going up, and there are a couple of supplementary questions to this: who is going to be hit by tax rises?
And, given pretty much all of us with a job might count ourselves as “working people”, are lots of you going to feel let down by the new Labour government should you find yourselves caught in tax rises?
I did get a more contoured definition of who the prime minister really means when the talks about working people.
For a start, he was clear to me that someone who gets their income from assets, such as shares and property, as well as work wouldn’t come within his definition of a working person.
This is a strong hint that rises in capital gains taxes could be on the way and also points to a bigger point that Starmer thinks the wealthy – workers or not – should pay more tax.
In his “mind’s eye”, he thinks working people are those who have a “sort of knot in the bottom of their stomach” and “can’t just get a chequebook out”, even though they have a “bit of savings”, if something were to happen to their family.
“They are the people that in a way I came into politics to try and make sure they had secure jobs. And didn’t have the anxiety of public services not working, and felt genuinely better off with better opportunities. That’s who I have in my mind’s eye,” he said.
Who might those people be? Is it a white van man hoping that fuel duty doesn’t go up, or a nurse worried that her council tax could rise?
Is it the millions of workers on the basic rate of income tax that could find themselves dragged into higher tax bands?
The chancellor could raise £7bn a year from that is she extends that beyond 2028. But if she does that on Wednesday, millions of those workers in Starmer’s “mind’s eye” might feel let down by this government.
In the election it helped the prime minister to have a broad definition of a working person because it meant he could talk to lots of groups of voters.
But now, as we get to the nuts and bolts of who is going to shoulder the burden of plugging gaps in the public finances, the “difficult decisions” as Starmer puts it, are going to bite.
We do now have, at least, a better sense of who he wants to protect in this budget from tax rises. But will his chancellor follow through?
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