As the UK gears up for the highly anticipated budget announcement next week, a curious debate has emerged around a term that has long been a staple in political discourse: “working people.” While the phrase has been liberally used by politicians across the spectrum, its precise meaning has come under intense scrutiny in light of the government’s commitment not to raise taxes on this demographic.
Promises and Perplexities
The Labour Party manifesto, which paved the way for their electoral victory, mentions “working people” a whopping 21 times. The Conservative manifesto, in comparison, uses the term 12 times. It’s clear that appealing to this segment of the population is a top priority for both major parties. However, as budget day draws near, the lack of a clear definition has left many scratching their heads.
Prime Minister Keir Starmer, speaking to reporters during a visit to Samoa, attempted to clarify the matter. According to Starmer, individuals who derive their income from assets such as shares or property “wouldn’t come within [his] definition” of working people. This statement quickly prompted a clarification from Downing Street, assuring that the Prime Minister was not referring to those who own small amounts of stocks or shares.
The Economic Lens
From an economic standpoint, a working person is typically someone who relies primarily on a regular wage for their livelihood, as opposed to those who can depend on unearned wealth, such as rental income or share dividends. However, the lines can blur, as many individuals may have a mix of earned and unearned income.
Those who have to rely on their pay packets and do not always have the means to write a cheque, and it is those who are hardest hit by economic instability.
– Spokesperson for Prime Minister Keir Starmer
The National Residential Landlords Association was quick to point out that 30% of landlords have full-time jobs, while another 10% work part-time. This highlights the complexity of categorizing individuals based solely on their income sources.
The Political Puzzle
In the political realm, “working people” has often been used as a catch-all term for the diligent, taxpaying citizens that most parties aim to court. The Conservative manifesto, for instance, promises that this group will benefit from lower taxes, higher pay, continued consumer protections, and more pragmatic net zero policies.
Labour peer and former cabinet minister David Blunkett admitted to being stumped when recently retired individuals asked him where they fit into the “working people” equation. “I don’t have a particular answer for them, actually,” he confessed to the BBC.
Taxing Questions
The Labour Party’s specific promise not to raise taxes on working people has brought these two worlds – the economic and the political – into sharp focus. Experts predict that this will likely translate to higher taxes on unearned income, such as capital gains tax.
However, there remains a significant gray area, including potential changes to employers’ National Insurance contributions, tax thresholds, and fuel duty. As one insider put it, “By Wednesday afternoon, will you know whether the government sees you as a working person? Possibly not. Will the arguments continue? Definitely.”
A Work in Progress
As the nation awaits the budget reveal, it’s clear that the definition of “working people” is still a work in progress. The government’s attempt to craft a narrative around protecting this group has, ironically, exposed the challenges in defining it.
While the economic definition may seem straightforward on paper, the realities of modern income streams and the political desire to appeal to a broad base have muddied the waters. As one commentator wryly noted, “Perhaps a working person is simply whoever the Prime Minister sees them as being.”
As the budget debate unfolds, one thing is certain: the term “working people” will continue to be a central, albeit ambiguous, part of the discourse. The government’s ability to navigate this semantic minefield may well determine the success of their economic vision and, ultimately, their political fortunes.
