Labour’s Definition of “Working People” Stirs Tax Debate
Labour’s pledge to avoid tax hikes on “working people” has raised questions over who this term includes, particularly as ministers consider employer national insurance increases. Analysts warn this could affect wages, sparking further discussion on what qualifies someone as a working person.
Labour leader Sir Keir Starmer defines a working person as “someone earning a living, often through a regular paycheck,” while those who rely primarily on assets like shares or property don’t fit this label. However, experts caution that tax changes in the budget could affect asset holders and potentially impact wages.
Key Tax Reforms on the Table
Potential tax changes, particularly around inheritance tax and capital gains tax, are also part of the budget discussions. Capital gains tax currently applies to high-value personal assets, including second homes and most stocks outside ISAs. Labour clarified that people with small investments are still “working people,” though Starmer excludes individuals relying mostly on assets from this category.
Chancellor Rachel Reeves has hinted at the challenges ahead. With a budget gap of £40 billion, the government may adjust fiscal rules, enabling up to £50 billion in borrowing for public projects.
