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Healey says employers are working people as Reynolds faces Budget criticism
Chancellor John Healey rejected Treasury minister Emma Reynolds’s suggestion that employers are not “working people”, saying in Parliament that they are. His response came amid criticism over whether Labour’s Budget measures comply with its 2024 manifesto pledge not to raise taxes on working people.
Reynolds had made the distinction between employers and employees while defending a two-percentage-point rise in income tax on property and savings income. Healey said the Budget protects earned income and dividends reinvested in businesses, and gives firms “breathing space”; he also said 70,000 high street businesses would pay no business rates. Labour argues it has kept its pledge because it has not raised the headline rates of income tax, VAT or employee National Insurance.
In short
- Healey said employers are working people.
- Reynolds had distinguished employers from employees.
- The dispute centres on Labour’s tax pledge and Budget measures.
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The case for
Labour’s case is that the pledge concerned taxes on working people’s earnings, and the Budget leaves the headline rates of income tax, VAT and employee National Insurance unchanged. The rise on property and savings income is therefore a distinct measure, while protections for earned income, reinvested dividends and some high street businesses support workers and employers.
The case against
Critics can argue that the pledge was broad enough to cover people who work by running or owning businesses, not only employees, and that higher taxes on property or savings income can affect working people who rely on those sources. They may also say that holding headline rates steady does not settle whether the Budget raises the overall tax burden on working households or businesses.
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Originally published by Daily Mail as “Chancellor slaps down his Treasury minister who claimed employers are ‘not working people’ – as John Healey insists his Budget offers ‘breathing space’ for firms”.