Keir Starmer and his colleagues have tied themselves in knots over their use of the term ‘working people.’ It has made the government look out of date and out of touch. Yes there are millions of people working full time on PAYE jobs. And many of them are ‘just about managing’ which is probably what Keir Starmer and Rachel Reeves have in mind. The idea that your class denotes which political party you ascribe yourself to is increasingly redundant, so the Labour Party cannot safely use the term working class. Many of us who had working class beginnings went on to benefit from comprehensive schools and free university and now see ourselves as middle class with working class roots. Add ethnicity into the equation and many with roots other than British see the whole class thing as irrelevant.
So, they reached for the term working people. But working patterns have transformed over the past twenty years. Hands up who has a side hustle or a portfolio career? Are people running businesses working people – and the self employed? Of course they are. And they don’t have the luxury of a paycheque landing in their bank accounts once a month. Instead they have all the stress of running the business and hunting for work. And apparently if you earn over £100,000, you don’t fall within this magical cohort that the Labour Party wants to focus on. So people earning six figures are not working people? And pensioners are expired working people.
If you earn money from shares or property you are the ultimate pariah. Lots of working people own shares because they are just trying to improve returns on their savings – or simply save for the future. Then there are people running their own businesses who are paid through shares and dividends, all perfectly routine.
So here are the stats on the 2.8 million landlords in the UK. 30% are employed full time, 28% are registered self employed, 10% are employed part time and 33% have retired and property is their pension.
One of the many problems with the UK tax system is that we file income from property as an adjunct to our self assessment tax forms. If property businesses are run personally, then it is really the same as self employment – people are running businesses and it should be taxed in that way. Running a property business involves managing construction projects, maintenance, lettings administration and compliance, financial strategy, book keeping, recruitment and management of tenants, liaising with contractors and neighbours, dealing with difficult situations and continuous professional development. About half of landlords engage agents to do some of this but they remain ultimately liable. 85% of landlords own 1-4 properties and many will have other work commitments or are pensioners.
I hope the government has learned that trying to put people and their work into simple categories has been a pointless exercise. ‘Working people’ like ‘Hard Working Families’ ‘Levelling Up’ and ‘Sustainable’ may leave politicians and some of their target audiences with a warm feeling. But drill down and their meaning is vague and wishy washy. Who and what gets included or left out causes offence. Let’s consign them all to the dustbin of history.
