Unions set out Budget demands ahead of Healey meeting

Labour's donor unions will meet Chancellor John Healey on Thursday to press their demands for next month's Budget.

The meeting puts Healey face to face with the movement's biggest affiliates before his first Budget on 28 October. Unions said they believe that Budget will define Prime Minister Andy Burnham's direction of travel, according to the BBC.

Unite, the UK's second biggest union, has called for a reversal of the freezing of tax thresholds. Then-Chancellor Rachel Reeves froze thresholds until 2031 in her last Budget. The freeze leaves the basic 20% rate payable on annual earnings between £12,571 and £50,270, and the higher 40% rate payable on earnings between £50,271 and £125,140. The effect is often called fiscal drag. Pay rises push more people into higher bands, even when the rates themselves do not change.

Unite leader Sharon Graham told Burnham that the cut to the winter fuel allowance under former Prime Minister Keir Starmer was a "disgrace". Unite took legal action against Starmer's government when the payment was restricted to the poorest pensioners.

Unison, led by general secretary Andrea Egan, is calling for the chancellor to increase tax on large tech companies to finance public sector investment and the transition to green energy. It is also calling for the Treasury to commission research into whether the balance of taxation needs to move from income to wealth.

GMB leader Gary Smith advocates approving the Rosebank and Jackdaw oil and gas fields in the North Sea. Smith said domestic production remains central to jobs and energy security arguments his union has made consistently.

The TUC has called for a bank surcharge to be reversed to cut energy bills. The surcharge is an additional tax paid by banks. It estimates that reversing the surcharge would raise £9bn over four years, according to the BBC.

Burnham said the freezing of tax thresholds came up on doorsteps when he was campaigning to return to Westminster as MP for Makerfield. He said he wanted to "have a proper look" at potentially raising the £12,570 starting threshold for income tax, in comments made in June.

Healey acknowledged high government borrowing costs but declined to be drawn on tax changes in the Budget, according to the BBC. He said the Budget would meet the government's fiscal rules and give businesses and families stability to plan for the future. The fiscal rules are the government's self-imposed limits on borrowing and debt. He faces pressure to raise billions of pounds in tax to offset higher borrowing costs, with further tax increases considered likely amid rising global borrowing costs, according to Reuters.

The broader context here is fiscal drag versus fiscal headroom. A long freeze raises revenue quietly without changing headline rates, but it leaves ministers open to the charge that workers pay more. That is why reversal matters to union leaders as a test of whether Burnham will break with his predecessor's approach. For Healey, any loosening must be paid for elsewhere if the fiscal rules are to hold. The GMB call on Rosebank and Jackdaw also sits uneasily with Labour's green commitments and with Unison's call for green transition funding. It is not a routine lobby. It is the point at which the government's funding base states its price.