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Union boss piles pressure on Labour after Reeves rules out wealth tax

TUC general secretary Paul Nowak calls for national debate about ‘how we tax wealth, not work, in this country’

Archie Mitchell
Thursday 07 September 2023 05:46 BST
PMQs: Keir Starmer calls for non-dom tax to be scrapped

Britain’s top union boss has piled pressure on Labour to promise a wealth tax, just days after shadow chancellor Rachel Reeves ruled one out if the party wins power.

The general secretary of the Trades Union Congress (TUC) called for a national debate about how to “tax wealth, not work, in this country”.

Paul Nowak said 13 years of Conservative government has seen the richest “feathering their nests” while working people suffer.

And he said Labour, which is reliant on donations from trade unions for much of its funding, does not need to set out its “comprehensive tax plans” a year before an expected general election, but said “there is a conversation that needs to be had” about wealth taxes.

Polling for the TUC conducted by Opinium showed "significant cross-party support" for increasing taxes on wealth and excess profits.

Almost two thirds of the public said wealthy people should pay more tax than they are now, including more than half of 2019 Conservative voters.

And three quarters of the public, including 73 per cent of those who backed the Tories in 2019, said capital gains should be taxed at the same rate or higher than income tax. Capital gains tax is currently 20 per cent for assets and 28 per cent for property, while the top rate of income tax is 45 per cent.

Mr Nowak said the system is set up to tax income but does not account for people making huge amounts from rental income, capital gains and dividends.

“There’s something not right in the UK. economy because we’re not rewarding work,” he said.

Ahead of the annual TUC Congress, which opens in Liverpool this weekend, Mr Nowak said a nurse will pay a bigger share of their income in tax than a City trader does on profits from their investment portfolio.

“That’s not only absurd and unfair – it’s bad for our economy and our public services too,” he said.

Reeves said in August a Labour government would not introduce a mansion tax on expensive properties or raise capital gains tax.

She also confirmed that Sir Keir Starmer’s leadership pledge to increase the 45p top rate of income tax is off the table, as the Labour leader had previously indicated.

It comes as the party steps up its efforts to demonstrate economic responsibility ahead of a likely general election next year.

Paul Nowak said 13 years of Conservative government has seen the richest ‘feathering their nests’ while working people suffer (PA Wire)

But Mr Nowak, who represents 5.5m members of 48 affiliated unions, said “the public overwhelmingly back increased taxes on the wealthiest”.

He told The Independent: “I will continue to bang the drum, because we have 5.5m people we are trying to represent and we desperately want to see investment in rebuilding our public services to give people some hope for the future.

“I think that national debate on taxes is gonna be part of it.”

He said on the “positive side” Labour has promised policies such as scrapping non-dom status and charging VAT on private school fees. But he warned Ms Reeves “will have to think more ambitiously” about how to fund Britain’s public services.

Mr Nowak said huge inequality has become the "norm" in Britain, with official figures showing that the richest 1 per cent of households each have wealth of more than £3.6m, and the least wealthy 10 per cent have £15,400 or less.

And he said living standards have plummeted and public services are "on their knees”.

Rishi Sunak does not send his kids to our state schools, he is not reliant on our NHS, it is not like he is popping on the train to get to work - because he has his helicopters,” Mr Nowak said.

“I do not think they see and experience the crumbling of our public infrastructure in the way that our members do,” he added.

He said unions have won important deals in the private sector, and forced the Government to change its position on pay for public sector workers including teachers and civil servants.

"We have demonstrated the difference unions can make, and our focus now is to continue to grow the union movement because we have a positive message to tell," he said.

Mr Nowak said the main cause of the strikes is a Government with no plan for boosting wages or building public services.

"It is a government without a message of hope."

Mr Nowak said unions know life would not be "perfect" under a Labour government, but the party is promising a new deal for workers, as well as repealing the legislation on minimum levels of service during strikes.

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