Labour’s biggest financial backers are piling pressure on Rachel Reeves to avoid making cuts at next week’s spending review and instead pursue wealth taxes to fund Britain’s public services.
Polling commissioned by the Trades Union Congress (TUC) reveals a majority the public (54 per cent) back taxes on big corporations and the most wealthy individuals as an alternative means of raising revenue. Just 28 per cent oppose the move.
TUC general secretary Paul Nowak urged the government to “stay on track” and build on the “positive start it made at last year’s budget by providing sustained funding for our public services and infrastructure” – warning that people are “fed up with a system where those with the broadest shoulders don’t pull their weight.”
It comes after deputy prime minister Angela Rayner pressed Ms Reeves to consider eight wealth taxes rather than try to impose cuts on departments.
The civil war within the government over next Wednesday’s spending review has seen hold outs from Ms Rayner’s Ministry of Housing, Communities and Local Government as well as Yvette Cooper’s Home Office.
The chancellor is expected to unveil a swathe of spending cuts as she attempts to walk the tightrope between delivering on the party’s election promises while sticking within the bounds of her self-imposed fiscal rules.
The TUC has also joined criticism of the Office of Budget Responsibility (OBR) over question marks on whether its flawed predictions are having a negative impact on spending plans.
The OBR produces forecasts twice a year alongside the Autumn budget and spring statement, which are used by the government to make fiscal policy decisions.
But Mr Nowak said it is now “time to review the role of the OBR and its fiscal assumptions to give the UK greater flexibility to invest in our future”, with the TUC arguing that short term changes in forecasts should not be driving long term government decision making.
Mr Nowak said next week’s spending review “can be the next key step in the government’s plan to rebuild Britain and deliver industrial renewal” as “communities are still crying out for meaningful change after more than a decade of Tory austerity and neglect”.
“The global outlook is challenging, but leaving our decimated public services without sufficient investment would risk both future growth and public trust”, he added.
“The message from voters is clear. They want the government to protect and rebuild our public services”, he said.
“If that means asking the wealthiest to pay more, the public are behind it. People are fed up with a system where those with the broadest shoulders don’t pull their weight.”
The warning from the TUC – which represents 5.3 million people in 47 member unions – will pile pressure on Labour, a party which has historically been heavily dependent on the funding it receives from trade unions.
In 2024, Labour declared £2.4m from union backers – significantly less than the £5m it declared from unions in 2019 after Unite refused to endorse the party’s manifesto.
The poll of more than 2,000 adults, conducted by Hold Sway, for the TUC shows there is widespread frustration at the current amount of tax paid by the wealthiest in Britain.
Nearly 6 in 10 (59 per cent) think the wealthiest do not pay their fair share – including 74 per cent of Conservative to Labour switchers and 72 per cent of those strongly considering switching from Labour to Reform.
More than half (56 per cent) think big businesses do not pay their fair share of tax, while just 31 per cent think they do.
The polling showed that two thirds of (67 per cent) voters back an annual wealth tax for estates above £10m, including 88 per cent of Tory to Labour switchers; and 81 per cent of Labour voters now strongly considering Reform.
Meanwhile, more than six in ten (63 per cent) back a windfall tax on banks – including 85 per cent of Tory to Labour switchers, and 78 per cent of those Labour voters now strongly considering Reform.
Some 50 per cent back raising capital gains tax, including 75 per cent of Tory to Labour switchers, and 67 per cent of those Labour voters now strongly considering Reform. Just 26 per cent oppose a capital gains tax hike.
The Hold Sway poll surveyed 2000 adults in Great Britain online between 30 May and 2 June.
A HM Treasury spokesperson said: “At the Budget, the chancellor increased investment in Britain’s security, health and economy. We did that at the same time as protecting taxes on working people. This week the chancellor will announce further plans to invest in Britain’s renewal”.
