As the UK eagerly awaits the government’s Budget announcement, the question of who exactly qualifies as a “working person” under Labour’s definition is still up in the air. Despite the government’s promise not to raise taxes for “working people,” Chancellor Rachel Reeves has yet to offer a concrete definition of the term or who she plans to protect.
Sir Keir Starmer, on the other hand, has defined a working person as “someone who goes out and earns their living, usually paid in a sort of monthly cheque” and can’t “write a cheque to get out of difficulties.” However, he clarified that those who receive additional income from assets like shares or property would not qualify as “working people” by his definition, other than those with a small amount of savings.
Meanwhile, Reeves characterizes working people as “strivers who graft.” She says this Wednesday’s Budget is for “hardworking families up and down the country who have been crying out for change.” Despite criticism that an increase in National Insurance contributions for employers could still affect working people, Reeves believes that the pledge to protect “working people” would not be violated by the hike in contributions.
When asked about the definition of working people, Treasury Minister James Murray said that “working people are people who go out to work for their income.” Though he declined to comment on whether landlords or owners of businesses would qualify as working people, Murray stressed that ministers aim to protect those who “get their income from work.”
Overall, despite the varying definitions of “working people,” former Bank of England governor Mervyn King warns that any significant tax increase will have the same effect on individuals, regardless of their status. If firms face higher taxes, they will be less likely to create new jobs and increase wages as a result, ultimately affecting everyone.
In conclusion, while the government promises to protect “working people” from a tax increase, the lack of a clear definition leaves many questions unanswered
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