Chancellor slaps down his Treasury minister who claimed employers are 'not working people' - as John Healey insists his Budget offers 'breathing space' for firms

Chancellor John Healey today slapped down one of his Treasury ministers who suggested employers are not 'working people'.Mr Healey contradicted comments made by Emma Reynolds, the Chief Secretary to the Treasury, as he sought to extinguish a furious row.Ms Reynolds came under fire at the weekend after she attempted to make a distinction over who Labour considers to be a working person.It came as she was grilled during an awkward TV interview over the Government's decision to increase the tax burden on landlords and savers at last week's Budget.She was challenged on whether Labour had broken its manifesto by ramping up taxes, after the party promised in 2024 not to raise them on working people.'I don't think employers are working people, they are companies,' Ms Reynolds told GB News on Sunday.But, quizzed about Ms Reynolds' comments in the House of Commons on Tuesday, Mr Healey publicly distanced himself from his Treasury colleague's remarks.'Of course they are,' the Chancellor said, when asked whether he thought employers are working people. Chancellor John Healey today slapped down one of his Treasury ministers who suggested employers are not 'working people'. Emma Reynolds came under fire at the weekend after she attempted to make a distinction over who Labour considers to be a working personHe added: 'It's why in this Budget I protected income that is earned, I protected income that is earned through dividends, which are reinvested into business.'I promised a breathing space Budget, that's what I've delivered. Help with the cost of living pressures, help with the cost of business pressures.'70,000 high street businesses taken out of business rates altogether to lift our local areas.'Mr Healey was tackled over Ms Reynolds' remarks by Tory former Cabinet minister Esther McVey.She said: 'At the weekend the Chancellor said the Budget would provide breathing space for families and working people.'So, can he tell the House today, does he agree with his minister... who thinks employers aren't working people?'Ms Reynolds had used the TV interview on Sunday to defend the Budget measures announced by the Chancellor last week.This included landlords and savers being hit by an extra two percentage points added to income tax on property and savings income. In the interview, host Camilla Tominey asked whether, because she employed a cleaner, she was not a working person.Ms Reynolds replied: 'No, but you're an employee probably of your company, and I'm saying there is a difference between employers and employees.'The exchange revived the debate about who Labour considers to be a working person, after the party's 2024 manifesto pledge not to raise taxes on them, including through VAT, national insurance, and income tax.Former chancellor Rachel Reeves's increase in the employers' rate of national insurance in October 2024 led to accusations of a manifesto breach.But ministers argued it was not, because it hit employers, not employees.Ms Reynolds told the broadcaster: 'In the manifesto, we were clear that we would not increase the headline rate of income tax, which we haven't done, and we haven't increased VAT, and we haven't increased national insurance for employees.'Tory shadow business minister Bradley Thomas said: 'Labour's patronising, out-of-touch, politics of envy on display here from Minister Emma Reynolds.'What about the thousands of small businesses who employ people? The electrician who works but takes on apprentices? The florist who runs her shop and has a young person work a few hours on weekends?'The list is endless and so is Labour's vindictiveness and denial of reality.'A Treasury spokesperson said: 'This Government has shown repeatedly and in the face of a difficult global economic backdrop that we will stick to our manifesto tax commitments.'We are being fiscally disciplined whilst keeping our promises not to increase the rates of income tax, national insurance, VAT, or corporation tax.'