Rachel Reeves should bring in wealth taxes at the autumn budget to deliver the change promised by Labour at the election and battle the rising threat from Reform, the UK’s most senior union chief has said.
Paul Nowak, general secretary of the Trades Union Congress (TUC), urged the chancellor to “stay the course” on her plans to invest in the country, adding that the government should not be afraid of adopting “a little bit” of economic leftwing populism.
Ahead of the TUC’s annual gathering this weekend, he called Nigel Farage an “absolute political opportunist” who could be challenged by Labour demonstrating that it was genuinely on the side of working people, through better employment rights and a fairer tax system.
In an interview with the Guardian, Nowak said: “It is clear that we need long-term fixes, and so the chancellor has to be prepared to look at tax. We think that there’s a public mood out there for a grown up conversation about what that means. And the crucial thing is that those with the broader shoulders are asked to pay a fairer share.”
Polling for the TUC found that a 2% annual wealth tax paid by individuals with assets worth more than £10m would be supported by 68% of people, with 22% against. This rose to 75% among 2024 Labour voters now leaning towards Reform.
The poll also found that increasing capital gains tax to the same level as income tax was supported by 51% of people, with 34% against. This rose to 57% among Labour backers now tempted to vote for Farage’s party.
There was even greater support for a package of tax rises including wealth taxes, higher taxes on gambling firms and a windfall tax on the profits of banks and other financial institutions, with 68% supporting the proposals as a whole, while just 23% opposed to them.
The TUC calculated that the wealth taxes could raise an extra £36bn a year, while a gambling tax could bring in £3bn more and a bank surcharge could raise between £20bn and £50bn over the next four years depending on the level it was set at, between 16% and 35%.
“The government’s got to stay the course. A little bit of economic left-wing populism would go a long way, because clearly that’s where the public mood is. On tax, on workers rights, people want to see change,” Nowak said.
“For far too many people, ‘change’ still feels like a slogan and not actually their lived reality. They’re still in the midst of a cost of living crisis. They still haven’t seen the improvements come through in public services.
“Every decision the government takes to demonstrate it’s on the side of working people is the right thing to do … No one thought the economy was going to be fixed overnight. But the worst thing the chancellor could do, having made that big upfront investment in the budget last year, is to pull back from that.
“I don’t think the balance is right at the moment. I think we’ve got a tax system that’s very good at taxing work, less effective at taxing wealth. That’s really the big inequality that we’ve seen opening up.
“That doesn’t take away from the fact we know we need to get growth into the economy, growth that makes a difference in people’s pockets. But this budget, if the choice is between fair taxes and cuts to the public services, we know whose side the chancellor should be on.”
Nowak, who has previously called Farage a “political fraud and hypocrite” who was “cosplaying” as a working-class champion in order to win votes, doubled down on his view that the Reform UK leader was a political opportunist.
“Nigel Farage is, as always, talking up whose side he is on. [But] he’s a political snake oil salesman. The gap between the rhetoric and what he’s actually prepared to deliver is massive. We have got a job to do, to show the gap between the rhetoric and reality,” he said.
“The way that we challenge Reform, and the way that a Labour government challenges it, is by demonstrating that they genuinely are on the side of working people.”
However, in a warning to the left, he said: “Frankly, I don’t think the alternative is Jeremy Corbyn in No 10. It’s Nigel Farage or Kemi Badenoch in No 10. And that should fill anybody who cares about the rights of working people, about our public services with absolute dread.”
