Landlords and asset owners are not “working people”, according to PM

Category: government and politics

The Prime Minister is facing fierce backlash for a controversial interview in which he states that asset owners do not count as “working people”, by his personal definition.

Speaking to a Sky News interviewer on the side-lines of the 2024 Commonwealth Heads of Government Meeting held in Samoa, Sir Keir Starmer stated that average “working people” would not be paying more tax as per the Labour manifesto.

If left unchallenged, that statement might have been entirely uncontroversial. But when pressured to give his definition of a “working person”, the Prime Minister clarified that he did not see people who gained most of their income through assets to be true workers and, therefore, they would not be covered by Labour’s pledge.

The interviewer, Beth Rigby, asked:

Okay, so for someone who works but gets their income from assets as well, such as shares from property, are they a working person?

And the Prime Minister brusquely replied:

Well, they wouldn’t come within my definition.

What exactly is a “working person”?

With “working people” being Labour’s favourite buzzwords as of late, this Sky News interview was not the first time that a Labour leader has been challenged on the actual meaning behind the phrase.

In a BBC Radio 4 interview, Treasury minister James Murray was confronted by a caller with the exact same question: are people who earn money from assets – such as landlords – considered workers by Labour’s new standards, and will they be subject to the same tax changes as everyone else?

Taking an approach somewhat more expected of a politician, Murray refused to answer no less than six times until the caller gave up. Instead, he repeatedly stressed that “a working person is someone who goes out to work and who gets their income from work”.

Starmer’s approach, while perhaps refreshingly blunt, was not an accurate view for many.

Landlords strike back

The Prime Minister’s statement has not been well received by landlords, asset owners and economists.

In anticipation of the public backlash, the No. 10 press office made a hasty bid to spin Starmer’s statement into something more palatable. However, they did not reference landlords in the correction:

[The Prime Minister] is accepting that people have some savings. Those might be cash savings, or stocks and shares ISA savings or whatever. So, it’s not precluding people that have a small amount of savings. Those individuals clearly are working people.

Ben Beadle from the National Residential Landlords Association (NRLA), who has often voiced support for Labour’s proposed housing sector reforms, nevertheless struck back against Starmer’s statement. He argued:

It is simply not true that landlords are not working people.

Official data shows that 30% of landlords are employed full time, with a further 10% working part-time. 28% are self-employed in some way, while 35% are retired and are likely to rely on their rental income for their pension.

Rather than stoking misconceptions, the Government needs to focus instead on the key challenge in the rental market, namely a lack of homes to rent to meet ever growing demand.

Starmer’s words will do nothing to reassure the widely held concern landlords have around the Labour government. The fact that the party’s press office were quick to try and back-pedal, is the only silver lining to take from this arguably unwise statement from the PM.