Fund income tax cut with raid on the wealthiest, says Labour’s biggest union backer

Andy Burnham should raise taxes on Britain’s wealthiest to fund a cut to the cost of living for working families, the leader of Labour’s biggest union backer has said. Unite general secretary Sharon Graham is demanding income tax thresholds are unfrozen and a “serious cut” to household energy bills. Writing for The i Paper, she urged the new Prime Minister to put working-class people “at the front of the political queue”. Graham’s intervention sheds light on the competing demands facing Burnham, and his Chancellor John Healey ahead of next month’s Budget, with the public finances under severe pressure and tax rises expected. Her remarks come as delegates gather in Brighton this week for the Trade Union Congress’s annual conference. Graham has renewed her calls on the Government to unfreeze income tax thresholds, arguing that nurses, teachers and tanker drivers are being dragged into the higher 40 per cent rate. Known as a stealth tax, the basic higher and additional rate thresholds have been frozen until 2031. As wages grow, more people are pulled into paying higher rates despite the cost of living also increasing. The Office for Budget Responsibility forecasts that the freeze will result in 4.8 million more people paying the higher rate by 2030/31, adding to the tax burden on working households. She is also calling for a “serious cut to household energy prices” financed by the profits of energy firms, with the union claiming big suppliers banked nearly £30 billion in 2024. The Government already taxes the exceptional profits of oil and gas producers through the Energy Profits Levy, but Unite wants energy firms to go further by helping finance lower household bills. To fund her proposals, Graham is also calling for a wealth tax on the richest 1 per cent, Capital Gains Tax to be aligned with income tax rates, a levy on excess bank profits and corporation tax to be restored to its 2010 level. She also wants the Chancellor to commit to “massive public investment”. Graham argues that the Government should borrow to invest, with new spending treated as an asset that can create long-term value for the country, rather than simply as a drain on the public purse. “You can’t rebuild Britain on a three-year time horizon that changes every time the OBR spreadsheet reloads,” she warned. “Decades of political neglect” have left working-class people ready to turn to extremism, she starkly claimed. “If we fail to act now, then rage will replace resentment,” Graham added. “The working class believe their best days are behind them. Labour’s job is to ensure that is not the case. It can be done. It must be done. Before it is too late.” Her intervention highlights the difficult balancing act Labour must strike between honouring its tax commitments and finding the money to ease pressure on working households. The party’s 2024 manifesto pledged not to raise the basic, higher or additional rates of income tax, National Insurance or VAT. The Government also committed to keeping the main rate of corporation tax at 25 per cent. Graham, by contrast, is calling for it to be restored to its 2010 level of 28 per cent. Burnham has acknowledged the pressure created by the freeze in the personal allowance, particularly as the state pension approaches the £12,570 threshold, and has indicated that the issue will be considered ahead of the autumn Budget. But that does not amount to a commitment to unfreeze income-tax thresholds generally. The Chancellor could instead look to measures outside Labour’s headline tax pledges, including Graham’s calls for a wealth tax, closer alignment between Capital Gains Tax and income tax rates, and a levy on excess bank profits. Whether the Government is prepared to use those levers will be a key test of its response to the pressure facing working households. Things are not working in Britain Among the debris of the old political centre ground there is one view that is shared widely in Britain. The idea that things are not working. It’s a view I subscribe to. If things don’t change then we will be in for a period of real turbulence. At the very centre of this moment is the working class. If they turn their back on politics, then our current malaise will feel like child’s play. Here is a stark fact. Since 1980 we have lost four million manufacturing jobs. Back then 25 per cent of all jobs in Britain were permanent positions in the broad manufacturing sector. Today it’s under 10 per cent. Those jobs were the bedrock of working-class communities. They were union jobs, where pay, terms and conditions were negotiated. But successive Governments have chosen to ignore the impact of radical offshoring. For decades our political class have been unrivalled cheerleaders for so-called choice and competition. What they ignored was the cost. And as the bitterness set in, our politicians doubled down. They were convinced by their own assumptions. Intoxicated by the free market. The work that replaced manufacturing has often been poorly paid, non-Union and temporary. At the same time the family silver was flogged off and we began to lose significant control over our own lives. Our power to act faded. But instead of wresting back the wheel, our political class revelled in becoming a passenger. Understanding that with a loss of agency also comes less responsibility. And as they let their collective hand slip, the profiteers were happy to move in for the kill. Energy and water are core infrastructure areas. But the privatisation bonanza crippled industry, and left our energy supply highly vulnerable to blackouts, network failures and security shocks. Meanwhile, our research showed that big energy firms made nearly £30 billion in profits in 2024. So, is it surprising that the working class began to turn their backs on Labour? Our political moment is perilous. Time is short. The far right is on the march, and liberal democracy is under threat. This calls for nothing less than transformation. The status quo cannot vanquish the siren voices whispering in the ears of working-class communities. If we fail to act now, then rage will replace resentment. And all hope of stable progress will be lost. Our political leaders will be tested again. Are they able to deliver more than an abstract notion of growth? Can they deliver the jobs of tomorrow and a better life for the working class today? In practice, that means massive public investment to turn back the tide of decline. And the bond markets cannot be an excuse for inaction. Our fiscal rules have changed nine times since 1997. They cannot be used to justify political cowardice as “sensible politics”. That is not hope. We must now borrow to invest and bring that money back into the public purse as an asset on our books. Plus have the resources to invest in our public services and our manufacturing base. You can’t rebuild Britain on a three-year time horizon that changes every time the OBR spreadsheet reloads. The relationship between markets and politicians will have to evolve. The markets will adapt. Long term, reliable planning from the state in return for less knee jerk reactions from the traders. But we also need change that people can touch and feel now. Signal policies to tackle the cost of living. A serious cut to household energy prices financed by the energy firms would deliver a clear message. And axing the threshold stealth taxes that threaten our nurses, teachers and tanker drivers with the higher rate of tax, would be a solid start. The money is there. We propose a wealth tax on the richest 1 per cent, equalising Capital Gains Tax with income tax rates; taxing Excess Profits of the banks and restoring Corporation Tax to 2010 levels. Economic certainty can be provided and politics restored, but only on the ground of serious ambition. The working class believe their best days are behind them. Labour’s job is to ensure that is not the case. It can be done. It must be done. Before it is too late. Sharon Graham is general secretary of the Unite union