Chief Secretary to the Treasury Emma Reynolds has faced criticism from Conservative and Reform UK politicians after suggesting that employers are not “working people”, reigniting questions about Labour’s definition of the term and its election promises on taxation. The remarks were made during an interview with GB News presenter Camilla Tominey on Sunday 1 November, while Reynolds defended the Government’s economic policies following the October Budget.
Reynolds draws distinction between employers and employees
Asked about people affected by Labour’s tax policies, Reynolds said: “I don’t think employers are working people, they are companies.” When Tominey asked whether employing a cleaner meant she was not a working person, Reynolds explained that someone might also be an employee of their own company. She maintained that she was distinguishing employers from employees, rather than judging how hard individuals work.
Conservative MPs criticise remarks
Shadow business minister Bradley Thomas cited electricians who take on apprentices and shopkeepers who employ weekend staff as examples of business owners who also work. Shadow work and pensions minister Helen Whately argued that businesses are built through hard work. Shadow defence secretary James Cartlidge highlighted the responsibilities involved in employing people. Their responses are political criticisms of the minister’s comments.
Reform UK joins row
Reform UK Treasury spokesman Robert Jenrick argued that millions of small-business owners employ staff while working themselves. He accused Labour of failing to understand business owners. The criticism adds to scrutiny of the Government’s approach to business taxation.
Labour’s tax pledge under scrutiny
Labour’s 2024 manifesto pledged not to increase specified taxes on working people. The Government says it has kept its commitments on headline income tax, employee National Insurance and VAT rates. The debate intensified after former Chancellor Rachel Reeves raised employers’ National Insurance contributions in 2024. Ministers argued the increase applied to employers rather than employees; opposition politicians challenged that distinction.
Treasury minister defends Budget
Reynolds defended the Government’s tax record during the interview and said ministers had deliberately targeted tax increases in the October 2026 Budget. She referred to changes affecting property and savings income and to measures intended to help households with energy costs. Her position was that the Government had made choices about which taxes to raise while maintaining its manifesto commitments.
Why the distinction matters
A limited company may employ people while its owner or director also works for the business. Sole traders can likewise employ staff. Consequently, being an employer does not necessarily mean an individual does no work. However, tax law distinguishes between employers, employees, directors and the self-employed. The dispute concerns the meaning and practical effects of Labour’s political promise, not a new statutory definition of “working people”.
Has Labour broken its manifesto pledge?
Reynolds’ comments do not themselves establish a manifesto breach. Ministers maintain that the specified headline tax rates have not been increased, while critics argue that higher employer costs can affect workers, recruitment and investment. No new tax measure was announced in the interview.
What happens next?
The exchange has renewed political scrutiny of the Government’s relationship with small businesses following the October Budget. The Treasury faces questions about how it explains the distinction between employer and employee taxation while acknowledging that many business owners also work in their own firms.