UK’s biggest union boss issues ‘no austerity mark II’ warning to Starmer

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Britain’s biggest union appears to be on a collision path with Sir Keir Starmer’s Labour government over plans for spending cuts and tax rises in the budget in October.

Sharon Graham, the general secretary of Unite, issued a warning to the recently elected Labour government against “austerity mark II” after Sir Keir warned that the budget will be “really painful”.

The union boss was echoing concerns that Starmer and his chancellor Rachel Reeves may follow the austerity policies of Tory chancellor George Osborne following the financial crash to pay for a £22 billion black hole in public finances, which Labour claims to have discovered.

The prime minister’s words on the budget came in a speech in the Downing Street rose garden in front of 50 supporters and activists from the last election.

He hinted at wealth taxes such as capital gains and inheritance but also refused to rule out more spending cuts.

A collision with Unite could prove problematic for the prime minister after it refused to endorse the Labour manifesto at the last election but still sponsors many Labour MPs.

Ms Graham echoed Labour’s election slogan of “change” which carried them to a record victory in the election before the summer but questioned whether Starmer’s government is delivering it.

She said: “We need change. A bleak vision of Britain is not what we need now. It is time to see the change that Labour promised.

“The chaos of the previous government is clear but we can make different choices to fix our nations. Britain can't wait for growth. Our industries can't wait for investment.”

Partly agreeing with Sir Keir’s analysis of the “rot” left by the Tories, she warned: “Britain is in crisis, yes. But to say there is no money to rebuild our industry and infrastructure, or to restore our public services, is simply not true.”

She called on Labour to pursue the rich with more taxes and not cut spending or investment.

Ms Graham has already clashed with the new government over the threat of the Port Talbot Steelworks closing in Wales, leaving thousands without a job.

The Unite boss said there was a different way to fill the £22 billion black hole Labour claims to have found in the country’s finances.

She said: “The top 50 families have more wealth than half our population. The profit margins of the average British firm have rocketed by 30 per cent since before the pandemic. If we taxed 1 per cent on the wealthiest 1 per cent, the so-called black hole would be gone.

“The money is there. It's time for a wealth tax on the super-rich and a tax on excess profits. We don't need more excuses about fiscal responsibility or talk of wealth creation.”

In the wake of the winter fuel allowance being cancelled for millions of pensioners as Labour sought to still fund public sector pay increases, she accused the government of “pitting pensioners against workers”.

She said: “That is not a choice that should be on the table.

“We now need Labour to have the courage to make the right choices. To be Labour and fight for change for workers and our communities.”