Labour’s Shifting Definition of ‘Working People’: A Timeline

Seems as Labour’s general election manifesto pledged to not increase taxes for “working people”, party officials have struggled to clearly define who exactly that term includes.

The manifesto promised that “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.”

On Wednesday, Sir Keir Starmer reaffirmed this. He said that the government won’t uphold it’s promise but the widening gap in public finances has ignited doubts about its sustainability and how the party ultimately defines a “working person”.

On Sunday, Transport Secretary Heidi Alexander seemed to imply that only individuals earning “modest incomes” would be considered working people but failed to clarify what she meant by “modest incomes”.

This, unfortunately, is not the first time Labour’s use of the phrase “working people” and its definition has faced backlash from the public.

The Telegraph examines how the definition of “working people” has evolved since last year when Sir Keir Starmer first made that promise.

Working people often lack savings.

Prior to the election, the Labour leader indicated that he didn’t believe “working people” typically had any savings.

His reply when asked to clarify what he meant by this comment was, “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 next day, Chancellor Rachel Reeves seemed to contradict him by stating that some working people do in fact have savings.

She stated 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.”

She continued with “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.”

Individuals earning six-figure incomes can also be considered working people.

The new government was faced with intense backlash and criticism over its definition of “working people” ahead of the Chancellor’s first budget last year in October.

Lisa Nandy was the first to suggest that a person earning a six-figure salary and going to work qualifies as a “working person”.

During an interview with Sky News, the culture secretary stated, “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, and call centres.”

When asked about whether or not 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 don’t qualify as working people.

The next day, the Prime Minister stated that he did not consider landlords or shareholders to fit his definition of working people.

When he was asked by Sky News whether those earning income from assets like shares or property would be considered working people in the budget, Sir Keir Starmer replied, “They wouldn’t come within my definition.”

At the Budget, the Chancellor announced a rise in capital gains tax but left property tax rates unchanged.

Owners of small businesses might not fall under the definition of working people.

Just days before the government’s first fiscal event, Bridget Phillipson declined to confirm whether a small business earning over £13,000 annually qualified as a “working person”.

The education secretary told BBC’s Sunday with Laura Kuenssberg that Labour defines a working person as someone “whose main income arises from the fact that they go out to work every day”.

Those who pay employers’ National Insurance contributions are not considered working people.

Upon revealing her first budget on October 30, Ms Reeves announced a rise in employer national insurance premiums.

The chancellor stated that “people will not see higher taxes in their payslips as a result of the choices that I am making today. That is a promise made and a promise fulfilled.”

Ministers maintained that this did not violate manifesto promises to avoid raising taxes on “working people”. They argued that the increased levy was paid by employers, not employees.

However, critics, including the Institute for Fiscal Studies, disagreed.

The then director of the Institute for Fiscal Studies, Paul Johnson, stated ahead of the budget unveiling that the manifesto didn’t “specify employee National Insurance” and therefore raising employers’ NI would be a breach.

He cautioned that the increase came from employee pay and could bring an increase in “less pay rises” and “possibly fewer jobs”.

Working people’s earnings are often described as ‘modest incomes’.

Ms Alexander said, on Sunday, that the government had pledged to not increase taxes for “people on modest incomes”.

She proceeded to tell 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.”

Her comments followed Sir Keir’s apparent openness to introducing wealth taxes, echoing support for the policy expressed by former Labour leader Lord Kinnock.