Labour has been accused of showing contempt for Britain’s small businesses after Treasury minister Emma Reynolds declared that employers were “not working people” during a heated television interview over the Government’s latest tax increases.
Ms Reynolds provoked an angry reaction after telling GB News presenter Camilla Tominey that employers were “companies” rather than working people, as she defended Labour’s claim that it had honoured its election manifesto commitments in the Budget.
The exchange has reignited questions over Labour’s definition of working people and whether the Government has broken its promise not to raise taxes on them.
Challenging Ms Reynolds over the Budget statement on Wednesday, Ms Tominey argued that increasing income tax on rental and savings income amounted to a breach of Labour’s manifesto.
“Can I put it to you that this Budget has, in fact, breached the Labour manifesto,” she asked. “Because you have raised income tax on rents and interests, and at the end of the day, landlords and savers are working people, aren’t they?”
Ms Reynolds rejected the accusation, insisting Labour had protected its central tax pledges.
“We have not broken the manifesto, because the manifesto committed to not increasing the income tax rate, VAT or National Insurance on employees, and we haven’t broken that in this Budget,” she said.
But Ms Tominey pressed her on the distinction between employees and employers, pointing to previous criticism of Rachel Reeves’s decision to increase employers’ National Insurance contributions.
She argued that business owners could themselves be working people and that landlords and savers were also earning an income through their work and investments.
Ms Reynolds responded: “Well, firstly let me say I don’t think employers are working people, they are companies.”
She added that Labour had not increased the headline rate of income tax, VAT or National Insurance for employees, and described the additional two per cent tax on property and savings income as distinct from an increase in income tax.
The presenter challenged that distinction, arguing that many people were simultaneously employers and employees, particularly those running small businesses.
“Employers can also be employees,” Ms Tominey said. “So I’m saying that if you’re going to put up National Insurance on employers, and you’re also going to put up income tax on people who rent out their properties or indeed who have savings, you are increasing income tax on working people.”
The remarks quickly became a political flashpoint, with opposition figures accusing Labour of being out of touch with the pressures facing businesses.
Reform UK’s Robert Jenrick led the criticism, writing on X: “Labour don’t think employers are working people! Tell that to the millions of small business owners who employ people. Labour haven’t a clue about business.”
Conservative MP James Cartlidge said employing people was among the most difficult responsibilities facing business owners.
“Employers aren’t working people??” he wrote. “Employing people is one of the hardest jobs there is. And Labour are making it harder.”
He added: “Building the team to make a business grow is rewarding but also a massive challenge – be great if someone in Labour understood this.”
Conservative Party chairman Kevin Hollinrake described Ms Reynolds’s remarks as “beyond belief”.
Former Conservative MP Bob Seely offered a broader political indictment, writing: “We are governed by Socialists. This is their logic.”
The controversy threatens to deepen the political fallout from Labour’s Budget, with the Government facing renewed scrutiny over who bears the cost of its tax decisions.
For ministers, the distinction between companies and employees may be central to defending their manifesto record. But the backlash illustrates the political danger of appearing to exclude business owners from the definition of working people — particularly when many small firms depend on their owners’ own labour to survive.
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