Unions Press Healey to Raise Tax Thresholds Ahead of Budget

raise tax thresholds is the demand at the top of the list as union leaders prepare to sit down with John Healey on Thursday, pressing their case before next month's Budget lands. The meeting matters because the unions involved are not bystanders. Unite, Unison and the GMB all have financial ties to the Labour Party, and they intend to use that access to shape the fiscal direction of a government still finding its footing. Their argument is straightforward: the freeze on tax thresholds has quietly pulled hundreds of thousands of lower earners into the tax system and pushed nurses, police officers and teachers into the higher rate. Reversing that freeze, they say, is the minimum a Labour chancellor should do. ## The Freeze That Keeps On Taking The mechanics of the problem are simple enough. The basic rate of 20% applies to annual earnings between £12,571 and £50,270. The higher rate of 40% kicks in on income between £50,271 and £125,140. When thresholds are frozen rather than uprated with inflation, wage growth does the rest. More people cross into tax for the first time. More workers cross into the higher band. Rachel Reeves, in her last Budget as chancellor, locked those thresholds in place until 2031. Sharon Graham, who leads Unite, the UK's second biggest union, did not mince words about the consequences. "That tax threshold of around £12,500 - if that hadn't been frozen for the past few years it would have moved up to over £16,000 now," she said. "People at the lower end are paying eye-watering amounts of tax." She wants more than a technical fix. Graham framed the ask in political terms, saying the government must make working class people believe their best days are ahead of them. She also confirmed she told Andy Burnham directly that the cut to the winter fuel allowance, carried out under former Prime Minister Sir Keir Starmer, was a "disgrace." Her remedy: "What you need to do is winter fuel in reverse - something that says to everyday people I am on your side." That line lands harder given the history. Unite took legal action against the government when the winter fuel payment was restricted to the poorest pensioners, a policy that never appeared in Labour's manifesto. Graham considered it politically poisonous, and the party's subsequent discomfort has done little to prove her wrong. ## Burnham Hears It On The Doorstep Burnham, now prime minister, has his own read on the mood. While campaigning to return to Westminster as MP for Makerfield, he said the freezing of tax thresholds came up on the doorsteps. That detail matters because it ties the policy question to the lived experience of voters rather than abstract Treasury arithmetic. Unions are also watching the broader signal. They believe Healey's first Budget will define Burnham's direction of travel as prime minister, and they are not shy about saying so. Andrea Egan, general secretary of Unison, the country's biggest union, is not expecting dramatic change straight away. She is expecting a new direction to be mapped out. Her union is demanding that Labour make clear it is under new leadership and is not just "continuity Starmer" with a more affable face. That phrasing will sting in Downing Street, precisely because it is aimed there. Unison's policy wish list goes beyond income tax. The union wants 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. Those are structural asks, not quick fixes. ## Oil, Gas and Half a Million Bricks Gary Smith, who leads the GMB, the third biggest union and another major financial backer of Labour, has a different revenue stream in mind. He has long advocated raising money from the oil and gas industries by approving the new Rosebank and Jackdaw fields in the North Sea. A decision on whether those fields go ahead looks unlikely until after the October by election in Sir Keir's former seat in north London, though the government maintains the timing is out of its hands because it is a quasi judicial decision. Smith is not waiting quietly. "The government really needs to get on with this," he said. "We are going to need oil and gas for generations to come. Rosebank and Jackdaw are good for jobs, good for the economy, but also good for the environment as we won't have to import so much from abroad as that is carbon intensive." He also wants confidence building measures for construction. His numbers are striking: half a million bricks stockpiled in this country, enough to build two Kidderminsters, with factories being mothballed because the house building programme is not moving. "They have to cut through the red tape," he said. Then there is the independent Budget watchdog. Smith wants the remit of the Office for Budget Responsibility revised so it accounts for the value of long term investment rather than just short term book-balancing. That is a quiet but consequential proposal. It would change how every future Budget is scored. ## What Happens Next In the next couple of weeks, TUC officials and representatives of unions that do not donate to Labour will also meet the chancellor. The pressure, in other words, is not coming from one direction. For now, the immediate question is whether Healey uses his first Budget to raise tax thresholds or holds the line on the freeze. Unite has made its position clear. Unison wants a signal. The GMB wants decisions on energy and construction. All three want to see a government that looks like a break from what came before. Whether the chancellor agrees will not be settled on Thursday. But the meeting sets the terms of the argument, and the unions have no intention of letting the moment pass quietly.

Frequently Asked Questions

What is the main demand union leaders are pressing John Healey on before the Budget?

The main demand is to raise tax thresholds, which is at the top of the unions' list as they prepare to meet John Healey on Thursday. They argue that reversing the freeze on tax thresholds is the minimum a Labour chancellor should do.

Why do unions argue that the freeze on tax thresholds is harmful to lower and middle earners?

The freeze has quietly pulled hundreds of thousands of lower earners into the tax system and pushed nurses, police officers and teachers into the higher rate. Sharon Graham noted that if the threshold of around £12,500 had not been frozen, it would have moved up to over £16,000 now.

How do the current income tax rates and bands apply to earnings, according to the article?

The basic rate of 20% applies to annual earnings between £12,571 and £50,270. The higher rate of 40% kicks in on income between £50,271 and £125,140.

What additional policy measures are Unison and the GMB advocating beyond raising income tax thresholds?

Unison wants the chancellor to increase tax on large tech companies to finance public sector investment and the transition to green energy, and it calls for research into shifting taxation from income to wealth. The GMB advocates raising money from oil and gas by approving the Rosebank and Jackdaw fields, and wants the Office for Budget Responsibility's remit revised to account for long-term investment.

When did Rachel Reeves lock the tax thresholds in place, and how does that affect future Budgets?

Rachel Reeves, in her last Budget as chancellor, locked those thresholds in place until 2031. This means that without uprating with inflation, wage growth will continue to pull more people into higher tax bands.