John Healey has distanced himself from remarks made by his colleague, the Treasury minister Emma Reynolds, as he confirmed employers did count as working people. 

Over the weekend, Reynolds told broadcasters that she did not believe employers counted as “working people” under the Labour manifesto’s definition as “they are companies”. She added that there was a difference between employers and employees. 

But when he was asked whether employers were working people in parliament by former Tory minister Esther McVey, the Chancellor said: “Of course they are.”

He also said he had “protected income that is earned” in his Budget, including by preventing a further tax increase on dividends while rejecting “broad-based tax rises”. 

Healey argued in Parliament that he had delivered a “breathing space Budget” and announced “fully funded policies” in order to “rebuild confidence in this country”. 

Healey re-ignites ‘working people’ debate

His comments are a far cry from Rachel Reeves’ first fiscal statement when a heated debate raged in Westminster over the definition of “working people”. 

Healey’s predecessor opted to raise employers’ national insurance contributions, a tax paid on workers’ earnings, by £25bn. 

Just months before that announcement, the Labour manifesto promised not to “increase taxes on working people”. It said a Labour government would “not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT”. 

The government said the large revenue-raiser did not break the party’s manifesto commitment because the promise related to employees’ national insurance, which is paid directly by working people. 

On Tuesday the Chancellor used an appearance before MPs to defend his first fiscal statement. He hit out at the Liberal Democrats’ Treasury spokesman, Daisy Cooper, for criticising a £2.6bn energy support package to help 20m households this winter that she argued was poorly designed at helping families in need. 

Bell vs Tice

Pensions minister Torsten Bell was also scolded by Reform UK’s Richard Tice, who claimed the former Resolution Foundation think tank chief had “inadvertently misled” parliamentarians by saying that borrowing was falling. 

Bell repeatedly said that “this government is bringing down borrowing”. While the deficit is forecast to narrow in each of the next five years, borrowing levels are projected to be higher than previously estimated, in part due to cover higher costs caused by the Iran war. 

In an afternoon hearing at the Treasury Committee, the current Resolution Foundation chief executive said the “catastrophic” element of the Budget related to forecasts showing near-stagnant living standards in the current decade. 

She said: “What is really catastrophic about these forecasts is the forecasts for household living standards.

“Where this Budget disappoints particularly is in not facing up to the squeeze on households and in not providing effective support as we enter a very difficult winter.”

Healey also said the upcoming summit with the European Union on 20 November would allow the UK to advance on trade deals related to food standards.

Reports have suggested that the two parties have agreed to a full 200-page text which removes Brexit checks on imports and exports of food and animal products.

Government analysis has claimed that trade in the sector could add £9bn to the UK economy. The new trading arrangements could be implemented by 2028.

While Andy Burnham had appeared to open the door to rejoining the single market in an interview with the Sunday Times, which would usher in the return of freedom of movement, he told ITV News he had “not proposed freedom of movement coming back” and wanted to have an “honest discussion with people about how immigration has changed since the Brexit vote”.

The Prime Minister is in Antigua for the Commonwealth Heads of Government Meeting, where he is in talks for the UK to issue a formal apology for the slave trade.

Healey told the House of Commons that “reparations are not the right approach” and “considering a formal apology does not mean British people should be held liable for the past in which they played no part in”. Burnham is pushing for a “debt reset” for several Commonwealth countries.