4 days ago
All the times Labour has changed the definition of ‘working people'
Ever since the Labour general election manifesto promised there would be no tax rises for 'working people', party figures have struggled to define what that means.
The manifesto claimed 'Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT'.
Sir Keir Starmer said on Wednesday that the Government would keep this promise, but a growing hole in the public finances has raised questions over whether this will remain the case, and how the party will define a 'working person'.
Heidi Alexander, the Transport Secretary, on Sunday appeared to suggest that only those on 'modest incomes' would be classed as working people. It was not clear how she defined a 'modest' income.
This is not the first time that the language surrounding 'working people' and how the Labour Party defines them has come under scrutiny.
The Telegraph breaks down how the term 'working people' has changed since Sir Keir first made that promise last year.
Working people do not have savings
Before voters went to the polls, the Labour leader suggested that he did not believe that 'working people' had savings.
Asked what he meant by a working person, Sir Keir told LBC in June: '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.'
The following day, Rachel Reeves, the Chancellor, appeared to contradict him by saying that some working people did have savings.
She claimed on Sky News that her definition was: 'Working people are people who go out to work and work for their incomes.
'Sort of by definition, really, working people are those people who go out and work and earn their money through hard work.'
Ms Reeves added: 'Many other people who go out to work have had to run down their savings.
'But there are people who do have savings, who have been able to save up and those are working people as well.'
People on six figures can be working people
The new Government came under intense scrutiny over its definition of 'working people' ahead of the Chancellor's first Budget in October last year.
Lisa Nandy first suggested that someone on a six-figure salary who goes to work counts as a 'working person'.
In an interview with Sky News, the Culture Secretary said: 'When I think about working people, particularly the challenges they face, I think about the factory workers, I think about people driving the buses in my constituency, working in the public services, working in the private sector, delivery drivers, call centres.'
When asked whether someone on a six-figure salary counted, the minister replied: 'I mean, if they go to work obviously they will be working.'
Landlords and shareholders aren't working people
The following day, the Prime Minister said that he did not believe that landlords or shareholders fell under his definition of a working person.
Asked by Sky News if those who earn income from assets such as shares or property would count as working people in the Budget, Sir Keir said that they 'wouldn't come within my definition'.
The Chancellor went on to announce an increase in capital gains tax at the Budget, but kept property rates the same.
Small business owners might not be working people
Bridget Phillipson, just days before the Government's first fiscal event, refused to say whether a small business owner who earned £13,000 a year was a 'working person' or not.
The Education Secretary told the BBC's Sunday with Laura Kuenssberg that Labour's definition of a working person was someone 'whose main income arises from the fact that they go out to work every day'.
Those paying employers' NI contributions are not working people
When Ms Reeves's first Budget was unveiled on October 30, she announced an increase to employer's NI contributions.
Standing at the despatch box, the Chancellor said that 'people will not see higher taxes in their playslips as a result of the choices that I am making today. That is a promise made and a promise fulfilled'.
Ministers insisted that this did not breach the manifesto promises not to raise taxes on 'working people' because it was employers, rather than employees, paying the increased levy.
But critics, including the Institute for Fiscal Studies (IFS), disagreed.
Paul Johnson, the then director of the IFS, said ahead of the Budget that the manifesto did not 'specify employee National Insurance' and therefore raising employers' NI would be a breach.
He also warned that the levy ultimately came from employee pay, and therefore an increase could result in 'less pay rises' and 'possibly fewer jobs'.
Working people earn 'modest incomes'
On Sunday, Ms Alexander said that the Government had promised not to put up taxes for 'people on modest incomes'.
She told Sky News: 'We made a commitment in our manifesto not to be putting up taxes on people on modest incomes, working people. We have stuck to that.'
