A government minister has refused to rule out raising taxes for higher earners.
Stephen Kinnock dodged the question nine times when Sky News’ Kay Burley asked whether people who earn more than £100,000 a year are “working people”, under Labour’s definition.
Labour’s manifesto pledged not to raise national insurance, VAT or income tax for “working people”.
However, the party has not revealed its exact definition of “working people”, raising concern it is getting ready to hike up taxes for certain groups at the budget on 30 October, including those who earn more than £100,000.
At present, people who earn between £50,271 and £125,140 pay 40% tax on that income and those who earn more than that pay 45%. People who earn more than £100,000 also currently have smaller personal allowances.
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Health Secretary Wes Streeting, talking to Sky News’ Trevor Phillips on Sunday, warned high earners should not expect help at the budget, suggesting it would focus on “people who are on lower or middle incomes”.
Pressed on that today, health minister Mr Kinnock said he would not speculate and added: “The chancellor will set this out on 30 October.”
He insisted the government would “not be breaking any of those manifesto commitments”.
The definition of “working people”, he said, has “to be seen in the round and that’s what’s going to be put on the table on 30 October”.
He added Chancellor Rachel Reeves will make the definition of working people “absolutely clear” during her budget announcement.
Sir Keir Starmer’s spokesman, when asked if somebody earning six figures is a working person, also dodged the question and referred back to Mr Kinnock’s comments.
Ms Reeves has been saying for months the budget will be “tough” and it was recently revealed she is aiming to fill a £40bn blackhole – much larger than the £22bn Labour said the Tories left them with.
On Sunday, Mr Streeting refused to rule out freezing tax thresholds, which would see more people dragged into higher tax bands.
The row over Labour’s definition of “working people” has ramped up over the past few weeks as it emerged Ms Reeves is expected to raise national insurance for employers.
Labour claimed this would not be breaking their manifesto as they only promised to not raise taxes for working people.
During the election campaign in June, Sir Keir Starmer said “working people” are those who are working but do not have meaningful savings.
Ms Reeves said they are “people who go out to work”, leaving voters none the wiser.
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Could Reeves change Labour’s fiscal rules to raise money?
What could be in the budget?
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What will the budget include?
She is expected to increase capital gains tax, paid on the sale of shares and other assets, to 33% or above, but not as high as 39%.
The current rate for higher earners ranges from 20% to 28% depending on the type of asset.
An increase will be seen as a wealth tax as only about 350,000 people a year pay capital gains, but they contribute £15bn in tax receipts, according to the Institute for Fiscal Studies.
Ms Reeves is also expected to cut some reliefs in the inheritance tax system and could keep council tax increases at 5% a year.
Motoring organisations have raised concerns Labour will increase fuel duty for the first time in 14 years by not continuing the 5p cut.