Rachel Reeves and Keir Starmer clash over whether working people have savings after Labour tax pledge

Rachel Reeves has clarified Sir Keir Starmer’s definition of “working people” days after the party pledged not to raise taxes on workers if it got into power.

The shadow chancellor backed up the promise in the party’s manifesto in a video message where she said she would not put up income tax, National Insurance or VAT.

But after Sir Keir appeared to omit pensioners and savers when asked for his definition of “working people”, senior Tories claimed it indicated the party actually intended to raise taxes.

Asked what he meant by “working people” in a radio interview on LBC on Tuesday, Sir Keir said: “People who earn their living, rely on our [public] services and don’t really have the ability to write a cheque when they get into trouble” he said.

“So the sort of people I’m meeting pretty well every day now. It’s quite a big group because these days there are many people obviously not so well off.”

But on Wednesday, Ms Reeves appeared to distance herself from her leader’s definition when asked on both Sky News and BBC Radio 4.

Ms Reeves told the Today programme: “Working people are people who get their income from going out to work every day, and also pensioners that have worked all their lives and are now in retirement, drawing down on their pensions.”

She added: “Many working people do have savings, but the truth is, during the cost-of-living crisis, loads of working people have had to run down those savings and have very little left, very little to draw upon.”

And speaking to Kay Burley, who put Sir Keir’s definition to her several times, Ms Reeves said: “Some people who go out to work haven’t been able to build up savings, many other people who go to work have had to run down their savings.

“But there are many people who do have savings and have been able to save up and those are working people as well.”

Following Sir Keir’s interview on LBC, Jeremy Hunt told The Telegraph Sir Keir had “let slip Labour’s true plans” to raise taxes across the board.

“Under pressure, Starmer has finally made it clear that Labour would raise taxes on millions of hardworking people who they don’t deem to meet their narrow and misguided definition of ‘working’,” he said.

On the announcement of a drop in inflation to the target 2 per cent, Ms Reeves also told Sky News she welcomed the news, but added the cost-of-living crisis was not over and that the prices faces by many families were still not falling.

Prime minister Rishi Sunak said the inflation fall from 2.3 per cent in April to 2 per cent in May showed the economy had “turned a corner”.