If you have been keeping up with politics as of late, then you know all about the Racheal Reeves budget and the uproar it has caused for middle-class people, working people, business owners and beyond. But with the vast majority of the UK population being working-class people living paycheck to paycheck, it’s so important for us to understand how political changes can impact our daily lives for better or worse.
Working people are the cornerstone of the UK economy; they ensure that everyday jobs are filled, whether it’s a bus driver, retail worker or very small business owner, they pay their way, abide by the rules and regulations, all the while trying to live a good life. That’s why it’s so important that we look after our working-class people, because if you push them too far, they will refuse and, in some cases, give up entirely, which puts a strain on other working-class people.
What 3 Labour Laws Are Going To Impact Working People
With regards to the budget and beyond what labour has done since their election win, we are going to discuss how the 3 have and are going to continue to impact working people in the 2026/27 and potentially beyond.
Benefit Funds
While the vast majority of working people are happy for their tax contributions to go towards helping disabled people live their lives out of poverty, aswell as children. However, it was announced during the budget reveal that benefits will increase by 3.8% alongside the 2-child benefit cap being lifted (while they are discussing again to not go through with this change, but we will see). While it’s positive to see that the government is addressing child poverty and encouraging people to have children by providing support, they’ve gone about it in a way that makes working-class people worse off.
The policy should include an incentive for people to work and not stop working to then get the exact same, and in some cases thousands of pounds more if they aren’t working. Research has suggested that a mother of 3 children will need to make £71,000 a year to keep up with someone on benefits with the same number of children and not working.
There is also no way for them to ensure that these additional benefits given are being spent on the children. In order to ensure that child benefits and the additional pay increase for people benefits are being spent on the things they need should include monthly virtual gift cards to be spent on electricity, gas, food stamps or gift cards for supermarkets excluding alcohol, cigarettes and other non-child-friendly goods.
If this were done without the pay rise, we would see a lot more children out of poverty, as parents are forced to spend it on them and not recreationally or irresponsibly. In addition, in order to be eligible for some of the additional benefits, parents should be working at least 16 hours a week.
Tax Freeze
Labour has extended the tax freeze on income tax and national insurance contributions thresholds until April 2031. This was initially introduced by the conservatives, but according to the Labour manifesto, they said they wouldn’t increase taxes for the working class and would actually work on reducing them to help working families during inflation.
However, a tax freeze, also referred to as a stealth tax or a fiscal drag, is actually putting working-class people in a worse position. As your wages will increase with inflation, so will your tax; it actually encourages fewer people to want a pay rise as the vast majority of it will be taken from you. Even if you are typically a higher earner, the tax margin pushes you back down to the working class. This isn’t good for several reasons; it not only prevents people from working hard, prevents people from contributing as much to the economy, which makes us worse off, and also is another negative incentive for working-class people not to bother, as you are essentially being punished for working.
It’s clear that Labour are trying to go for a socialist working economy, but we are already seeing the backlash, as people don’t want to have to pay for lazy people’s lives and government spending that isn’t going back into the community or spent on our public services.
Immigration
While this has been a very big topic and while it’s always been a discussion, with changes to labour policies, it’s becoming more prevalent that it’s becoming a cause of concern for some working people, for the right reasons. There has been more money and an estimated of 5 billion on foreign aid and on illegal migration this year the UK is looking to spend 15.3 billion, is has increased from 5.4 billion in 2023/24 which an insane increase.
There is discussion in the media that seeking asylum and entering the country illegally are jumping the queues for healthcare from NHS visits, dental care and so forth, aswell as being given free travel so they can go to their appointments. They are also being given homes and spaces to live rent-free with weekly money to spend on food per person.
The issue people are having with this is that working-class people pay their national insurance but are struggling to see an NHS dentist, get an appointment and struggling to afford travel, not only to and from work but also missing work to then attend health appointments that they then still have to pay for in some cases.
It’s important to disclose that people fleeing from war countries they it heartbreaking and finding safety is important; however, it’s important that we ensure that people coming here are here for those reasons and not because they just can be. Ensuring that British and those who have come legally, whether they be on a working visa or indefinite leave to remain, individuals are tended to first and those second, as it appears that the Government cares more for the well-being of strangers than people who have paid into this economy. Check our the services of Immigration Lawyers in London.
