Labour’s union paymasters demand wealth tax and more employment rights as TUC leader warns Burnham not to ignore them – or cap donations to party
TUC general secretary Paul Nowak has called on Labour to impose fresh wealth taxes on businesses and the financial sector, and to strengthen workers' rights further, despite the fragile state of the UK economy. Speaking ahead of the TUC's annual conference in Brighton, he argued that the Employment Rights Act should not be seen as final and that a future Labour manifesto must go further, while urging Sir Keir Starmer to press on with measures to ease the cost of living. His remarks are likely to unsettle businesses already affected by a series of measures introduced since Labour took power.
The TUC's submission to next month's Budget will call for a windfall tax on banks over their "huge" profits and bonuses, alongside insourcing of public services. Nowak also demanded that trade unions be exempt from any cap on political donations, despite Starmer previously backing a £500,000 limit on cash gifts to parties amid controversy over a £15 million donation to Reform from businessman Christopher Harborne; the Prime Minister has since stepped back from supporting a similar cap following union lobbying. Nowak said polling showed the cost of living, particularly energy bills, remained voters' top concern, and that the Prime Minister would need to face down employer resistance to deliver further reforms.
- TUC chief urges Labour to raise business taxes and expand workers' rights
- Unions want exemption from any cap on political donations to parties
- TUC to demand windfall tax on banks in Budget submission
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Labour's relationship with the trade unions has become a live tension for Sir Keir Starmer's government. Unions such as those represented by the Trades Union Congress (TUC) provide significant funding and support to the Labour Party, and their leaders are now pushing ministers to go further on issues like taxing wealth and business, and expanding rights for workers, at a time when the economy remains weak.
The TUC is the umbrella body for Britain's trade unions, and its general secretary, Paul Nowak, speaks on behalf of that movement. Andy Burnham, the mayor of Greater Manchester, is mentioned as someone the unions want to see backing their demands; he is a senior Labour figure often discussed as a potential future leadership contender. The question of political donations has also become sensitive, after a large gift to the Reform party from a wealthy backer prompted debate about whether limits should be placed on such donations, including those unions give to Labour.
This matters because it exposes the balancing act facing Starmer: unions are a core part of Labour's traditional base and financial support, but their demands for higher taxes and stronger employment protections could unsettle businesses and complicate the government's economic strategy ahead of the autumn Budget.
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The strongest fair case each way — we don't pick a winner.
The case for
Supporters of the TUC's stance argue that unions are founding stakeholders of the Labour Party, representing millions of working people whose living standards have been squeezed by high energy bills and years of wage stagnation, and that it is entirely legitimate for them to press the government to honour its founding purpose. They contend that windfall taxes on banks reporting large profits, and a firmer floor of employment rights, are proportionate ways to fund public services and redistribute gains that have not reached ordinary workers. On donations, they argue that union funding is transparent, collectively raised from millions of small member subscriptions rather than a single wealthy individual's cheque, so treating it the same as opaque billionaire donations such as Harborne's gift to Reform would unfairly weaken the party's most democratic funding source.
The case against
Critics, including many employers, argue that piling further wealth taxes and employment obligations onto businesses at a time of weak growth risks deterring investment, raising costs, and ultimately costing the jobs that workers rely on, especially in the financial sector which contributes significantly to tax revenue and the wider economy. They contend that the Employment Rights Act already represents a substantial shift and that continually promising more before it has even bedded in creates damaging uncertainty for firms trying to plan ahead. On funding, they argue that a genuinely fair cap on political donations should apply equally to all large donors, and that carving out an exemption for union affiliation fees simply because it benefits the governing party undermines the credibility of reform and looks like special pleading rather than principled policy.