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Sir Keir Starmer has attempted to define who “workers” are, as part of a new scrutiny of his tax plans ahead of next week's Budget.
Labor promised in the general election not to raise taxes on workers, but is considering raising some taxes to fund public services.
This could include an increase in taxes on the sale of assets, such as stocks and real estate, a freeze on income tax thresholds and changes to inheritance tax.
Sir Keir was repeatedly asked whether “workers” would be affected by these changes.
He insists that won't be the case, but he has struggled to come up with a clear definition of what counts as a worker in the government's eyes.
During an interview at a summit of Commonwealth leaders, the Prime Minister was asked whether those who work, but receive additional income from assets such as shares or property, would be considered workers.
He responded that they “would not fit my definition” – but cautioned against any “assumptions” about what this would mean for tax policy.
He said he viewed a working person as someone who “goes out and earns a living, usually paid in the form of some sort of monthly check” and who cannot “write a check to get out of trouble “.
Speaking afterwards, his spokesperson wanted to clarify that those who had a “small amount of savings” could still be defined as workers.
This could include saving cash or stocks and shares in a tax-free individual savings account (ISA), he suggested.
But ministers have been reluctant to translate these comments into figures.
“Hypotheticals”
The Prime Minister admitted his own definition was “broad”.
The people he had in mind, he added, were those who were “doing fine” but had “an anxiety in the pit of their stomach” about making ends meet if something unexpected happened. happened to their family.
The issue has taken on central political importance in the run-up to next Wednesday's budget, Labour's first since 2010, amid a dispute over whether the party is delivering on promises made in its election platform.
In an interview with the BBC in the United Kingdom, Treasury Minister James Murray was repeatedly asked to give a more specific answer.
When asked if someone who owned stocks or sold a business could be an active person, he said he wouldn't “get into too many hypotheticals.”
Minister asked if owners were considered “workers”
As well as the general commitment not to raise taxes on workers, Labor's manifesto specifically rules out increasing the rates of income tax, as well as national insurance and value added tax ( VAT).
But ministers do not rule out continuing to freeze income tax thresholds beyond 2028, a policy they inherited from the Conservatives, pushing more people into higher brackets over time, at as wages rise with inflation.
And they have also not ruled out forcing employers to pay national insurance on their contributions to workers' pension funds, which the Conservatives have called a “tax on work” that would indirectly hit workers.
Labor peer and Blair government minister Lord Blunkett said the “logical outcome” of the move was that “employers will pay less”.
He also warned that he was unsure of the government's definition of a working person, adding: “We need to find a different phraseology.”
Other tax increases discussed include capital gains tax, which is paid on profits made from the sale of assets, including stocks and property other than a primary residence.
The government also plans to increase the amount of inheritance taxes, which are paid after around 4% of deaths.
Multiple changes to the tax, which currently includes several exemptions and reliefs, are under consideration.
