Labour should consider using wealth taxes to raise £10bn as the UK “needs to go further” to bring in money to repair public services, the head of the Trades Union Congress has said.
Paul Nowak, the general secretary of the organising body for trade unions in England and Wales, said proposals put forward by the TUC to bring capital gains tax into line with income tax or to impose a wealth tax on assets of more than £3m were “relatively modest” and were supported by the public.
The TUC said a poll by Opinium found 61% of people think the wealthy should pay more tax than they do now, including 53% of Tory voters in the 2019 general election.
Labour is resisting calls from unions and some on the left of the party for higher wealth taxes, with the shadow chancellor, Rachel Reeves, saying last month she had “no plans” to introduce them.
Speaking before the TUC’s annual meeting of unions next week, potentially the last before a general election, Nowak said many people with wealth of more than £3m would think paying more tax was worth it for “safer streets, better hospitals and better roads and rail”.
He said: “I want every politician to pick up our ideas because I’m ambitious for working people. Labour have said some really progressive things on tax. Keir [Starmer] has made it clear he doesn’t want to see income tax rise for workers and I actually think he’s got a very valid point.
“For supermarket workers and school teachers in the middle of a cost of living crisis, it’s right to reassure people they aren’t going to pay more tax. But if we are going to repair and renew our public services, we are going to have to find the resources from somewhere.”
He said an “economic reset” was needed to reward work, not wealth, through the tax system after “the grotesque inequality of the Tory era”.
Labour is funded by a number of major trade union members of the TUC, many of whom are affiliated to the party and play a role in its policy formation and structure. The party’s tax policies will be based on the national policy forum process and agreed motions at party conference, but which ones enter the manifesto will ultimately be decided by Starmer, Reeves and the shadow cabinet.
Nowak said he thought all parties should consider backing wealth taxes given polling showing how popular it is, even among Conservative voters, and he called on the chancellor, Jeremy Hunt, to adopt the policy suggestions too.
“Our polling shows there’s huge support to tackle tax avoidance via HMRC. There’s huge support for a proper windfall tax on the oil and gas giants and the banks. I think you could build a political consensus around that,” he said. “But we are saying you need to go further. We’ve said there’s a case for equalising capital gains tax and income tax.”
He added: “Labour have already set out what they’ll do on clamping down on non-doms and VAT on private school fees and talked about taxing the online giants more fairly. But we think that conversation needs to go further.
“The starting point of that conversation is that we need a tax system that rewards work and not wealth. The richest 1% have seen their wealth rise 31 times faster than anyone else in the last decade. At the same time, our members are struggling to pay the bills.”
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The TUC conference is due to start on Sunday after a year of strikes across the economy in a way that has been unprecedented for decades. Nowak said workers had learned over the past year that “they can move the government” to give them higher pay after industrial action and that “members will not want to have another year of a real-terms pay cut”.
He said: “I don’t think you can make predictions about what that means in terms of industrial action … but I know in the public sector there are lots of staff feeling demoralised by the state of the services they are working in. I think people will look at what happened this year and say, well, they told us this year they weren’t going to move and we moved them, so we can do it again.”
Nowak said Labour’s new deal for workers, intended to improve rights, was a “really good starting point” for the first 100 days in office of a Starmer-led government. Unions voted for the package at the party’s national policy forum in July, apart from Unite which said it had been watered down.
“The broad consensus is that Labour is committed to delivering that deal,” Nowak said. “I’ve got no doubts at all that Keir is committed to the new deal delivered in the first 100 days. I think Angela Rayner will reiterate that message on Tuesday [at the conference].”
He added: “I’m never 100% satisfied. I’m a trade unionist and I always want more, and the reason is that I’m always ambitious for working people and I always want to be pressing Labour, and indeed any politician, that this is the stuff our members need.”
Nowak said he had spoken to the parliamentary Labour party recently about the party’s approach to workers’ rights and businesses.
“Labour, if it’s a serious party of government, obviously does need to engage with business and employers. But there’s a difference between engaging with the business lobby and letting that lobby dictate policy,” he said. “The new deal for workers is a good example of where Keir has spoken to employer audiences talking about that new deal as well as a better environment for business. That’s the key for me.”
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