Sir Keir Starmer has denied misleading the public at the general election after he suggested Labour could raise taxes on working people.
The Prime Minister rejected claims he had waged a “war on middle Britain” following speculation he could increase the burden for those who have income from assets.
When asked whether he had misled the public in the Labour manifesto, the Prime Minister said: “No, we were very clear about the tax rises that we would necessarily have to make, whatever the circumstances, and you’ve listed them there, and I listed them, I don’t know how many times in the campaign.
“We were equally clear in the manifesto and in the campaign that we wouldn’t be increasing taxes on working people, and spelt out what we meant by that in terms of income tax, in terms of NICs and in terms of VAT and we intend to keep the promises that we made in our manifesto.”
Labour had pledged in its manifesto not to hike taxes on what it described as “working people,” explicitly ruling out increases to VAT, national insurance, and income tax.
But when he was asked to define the term during a broadcast interview in Samoa earlier this week, Sir Keir said it was someone who “goes out and earns their living, usually paid in a sort of monthly cheque” and who cannot “write a cheque to get out of difficulties”.
At a press conference at the end of the Commonwealth heads of government meeting (Chogm) on Saturday, the Prime Minister was asked whether he was “plotting a war on middle Britain”.
He said: “No. Let me be clear about that. What we’re doing is two things in the Budget.
“The first is fixing the foundations, which is dealing with the inheritance that we’ve got, including the £22 billion black hole.
“We have to deal with that.
“In the past leaders have walked past those problems, created fictions, and I’m not prepared to do that.”
Chancellor Rachel Reeves will give her Budget in the Commons on Wednesday.
Sir Keir suggested it will need to meet three tests to be considered a success for the Labour government.
He said: “What I want to be judged on is one – have we made people better off? Do they feel better off under a Labour government because we fixed the foundations?
“And secondly, that we genuinely pick the NHS up, put it back on its feet, but also at the same time reimagine it and make it fit for the future.”
He added: “But it is also about fixing our public services, and building the Britain that people are entitled to and deserve.”
The Prime Minister said earlier this week that he does not consider people who have an income from assets such as shares of property to be working people, paving the way for potential tax rises.
“They wouldn’t come within my definition,” he said.
But Downing Street attempted to climbdown on Friday by clarifying that those who hold a small amount of savings in stocks and shares still count as working people.
The Prime Minister’s official spokesman said Sir Keir meant someone who mainly gets their income from assets in his interview.
Ms Reeves could seek to find £40 billion in tax hikes and spending cuts in order to avoid a return to austerity in next week’s fiscal statement, sources suggested.
Capital gains tax, inheritance tax and fuel duty are among some of the levers she will pull to raise revenue.
Ms Reeves has admitted she will raise some taxes, pointing to a £22 billion black hole in the public finances which she says she discovered had inherited by the Tories.
