The Trades Union Congress (TUC), representing unions across the UK, is urging Chancellor Rachel Reeves to consider implementing a range of wealth taxes in the upcoming November Budget. The aim is to bolster investment in vital public services.
Speaking with the BBC, TUC General Secretary Paul Nowak emphasized the need for tangible change.
“We need a progressive tax system – encompassing levies on online gaming and gambling companies, as well as a tax on the windfall profits accrued by banks and financial institutions in recent years.”
In response, the Treasury referenced previous comments from Reeves, stating that the government has struck “the right balance” in taxing higher earners, citing new taxes on private jets and second homes.
During the interview, Mr. Nowak implored Reeves to “not take anything off the table” and to explore options such as aligning capital gains tax with income tax, and potentially introducing “a wealth tax itself.”
“Such measures have been implemented in other nations, including Spain, which currently boasts one of the fastest-growing economies.”
Individual unions are expected to echo these demands as the TUC’s annual Congress commences this weekend.
Mr. Nowak particularly highlighted the rationale for increasing levies on financial institutions.
“Banks are reporting record profits, fueled by the prevailing high-interest rate environment.”
“We believe it’s possible to maintain a profitable banking sector while also ensuring they contribute their fair share.”
The Prime Minister reiterated this week that Labour’s fiscal rules remain non-negotiable.
Consequently, tax increases appear inevitable in November to meet the Chancellor’s self-imposed constraints on debt and borrowing.
The ongoing debate within the Labour movement, and beyond, centers on who should be taxed and to what extent.
Mr. Nowak pointed out that “the big four high street banks generated £46bn in profits in a single year.”
Charlie Nunn, CEO of Lloyds Bank, has previously voiced opposition to potential tax increases on banks in the upcoming Budget.
He argued that efforts to stimulate the UK economy and cultivate a robust financial services sector “would not be consistent with tax rises.”
Furthermore, when the left-leaning think tank IPPR suggested further taxing bank profits, share prices experienced a decline.
When questioned about the potential for market volatility and investor flight, Mr. Nowak responded: “Britain remains an attractive destination for international investors,” suggesting there hadn’t been “an exodus of millionaires” after tax changes for non-doms and the end of VAT exemption for school fees.
He asserted that TUC polling indicated that introducing wealth taxes to fund public services proved most popular among voters who had shifted from Labour to Reform UK.
As Nigel Farage’s party conference commences in Birmingham on Friday, Mr. Nowak cautioned Keir Starmer: “Change still feels like a slogan rather than a lived reality. There is a real danger that if the government doesn’t deliver the change people want, they will become disillusioned with mainstream politics, and some will look for divisive alternatives like Reform.”
While the Chancellor has expressed reservations regarding a conventional wealth tax on assets, some within the broader Labour movement are urging her to consider how those with “the broadest shoulders” can contribute more.
Certain members of the union movement are hopeful that the appointment of a new economic advisor within Downing Street, reporting to the Prime Minister, may lead to a more open dialogue on taxation.
That advisor – Baroness Shafik – has in the past advocated for taxation on wealth and land.
“The public are not naive – they understand there are difficult choices,” Mr. Nowak stated.
“We need a mature conversation.”
A Treasury spokesman told the BBC that the government’s number one priority was to grow the economy and pointed to the chancellor’s words last month.
Rachel Reeves said: “We introduced increased taxes on private jets, on second homes and increased capital gains tax.
“So I think we’ve got the balance right in terms of how we tax those with the broadest shoulders. But any further decisions will be ones that are made at a budget in the normal way.”
The deputy prime minister is facing a standards investigation, after admitting she underpaid stamp duty.
Investigations by Sir Laurie Magnus have previously led to the resignations of two ministers.
The deputy prime minister says she has referred herself for an ethics probe by the PM’s adviser.
The Scottish budget, normally published in December, is “unlikely” to be published until January.
The chancellor hits back at speculation over tax rises, but will need to find the money from somewhere.