by The backbencher of Labour’s biggest union is demanding that Rachel Reeves impose a wealth tax on the richest 1 per cent to give public sector workers a pay rise.
Ahead of the Chancellor’s first Budget in October, Unite tabled a motion at the Trades Union Conference to demand the levy to raise billions for public services.
The bid from Unite, which gave Labor nearly £2 million in the year leading up to the election, says such a tax would raise £25 billion a year and could be used “to raise wages by 10 per cent give a first to workers in the public sector”.
The Accord union, which represents workers in banks and the financial services sector, called on Ms Reeves to bring capital gains tax in line with income tax. He also urged her to close inheritance tax loopholes and extend National Insurance.
Another trade union group called for a widespread program of nationalisation. Unison, PCS, RMT and Aslef urged the Chancellor to bring about public ownership of energy, water, transport, jobs, broadband, education, health and social care. Usdaw, the shop workers’ union, called on her to end the limit on the two-child benefit.
The resolutions will be discussed at the TUC next month.
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On Thursday, Kwasi Kwarteng, a former Tory chancellor, predicted that Labor would introduce a wealth tax by the next election to pay for public sector pay rises.
He told GB News: “I think there will be bigger and higher wage settlements, which will be paid for with higher taxes, and the Exchequer is obviously spinning and suggesting what’s going to happen.
“And my question is, what taxes are they going to put up? They will probably try to tax the rich. So I very much doubt that, before the end of Parliament, we will have some form of tax on the mansion, a wealth tax.”
Ms Reeves opened the door to tax rises, after accusing the Tories of leaving a £22 billion black hole in the public finances.
Last month, she told MPs it was time to “level with the public” about the tough decisions that may be required, including cuts to public spending.
It is believed she could try to claw back money by closing inheritance tax loopholes and aligning capital gains tax rates with income tax rates.
The demand for a wealth tax on the richest 1 per cent was backed by former Labor leader Jeremy Corbyn, now an independent MP.
On Thursday, he wrote on X: “Austerity has devastated our communities and pushed millions into poverty. To repeat this failed economic experiment would be a catastrophic mistake.”
He referred to a claim in an Oxfam report that the country’s richest 1 per cent have more wealth than 70 per cent of Britons, adding: “Stop cutting our services and taxing the rich in instead.”
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The Unite motion states: “Congress believes that waiting for money from growth will not deliver the investment needed to fix our broken economy and restore the living standards of public sector workers. Various choices will need to be made, including around taxation, additional borrowing and collective bargaining.
“Congress notes that a wealth tax on the richest 1 per cent could return local authority funding to austerity levels, or give public sector workers a 10 per cent pay rise and existing NHS vacancies to fill. Congress calls for a wealth tax on the richest 1 per cent to raise £25 billion a year for our public services and the NHS.”
The union also called for the return of collective bargaining to raise workers’ wages, and the automatic right to union recognition.
The RMT motion said Labor could not rely on the prospect of economic growth to fund public service improvements.
“Labor urgently needs to deliver a significant increase in real terms to public spending and investment, both as an immediate requirement and as part of a longer-term economic strategy for sustainable growth,” the motion said.
“The Conference therefore agrees that the General Council will urgently agree a constructive high-profile public campaign to make a strong case for a more radical, progressive and credible economic strategy for national renewal.
“This campaign will include making the case for reforms to the fiscal rules that are unnecessarily restrictive and arbitrary as well as reforms to taxation, introducing wealth taxes, and redistributing wealth. This campaign will be launched as soon as possible to influence the next Budget and the Budget to come and to lobby MPs and the Cabinet.”
Accord called for a “fair” tax system in its motion, saying: “Congress calls on the TUC to make the case for a more progressive system of taxation, including equalizing capital gains tax with income tax, so that tax equal to all incomes. it doesn’t matter whether it comes from wealth or work.”
Other changes proposed by Accord include the end of inheritance tax loopholes, including allowances for agricultural and business land and special treatment of alternative investment market shares.
The union also called for National Insurance to be applied to investment income so that all income is taxed at the same level.
Usdaw’s proposal calls for an end to the “two-person limit”, which will remove certain benefits for the third and subsequent children. Its motion said: “Conference calls on the Labor Government to positively promote properly funded employment and social welfare as an integral part of today’s functioning society.
“As a first step, Congress calls on the government to urgently convene a task force that sets out a time frame for introducing measures that address the injustices and flaws in the current system … the two-child limit.”
