- Sharon Graham wants ministers to lift frozen income tax thresholds and cut household energy bills before the October Budget.
- Unite backs a one-off 1% wealth tax on the super-rich, plus higher capital gains and corporation tax.
- The freeze runs to 2031, which could push more workers into the forty per cent tax band as pay rises.
Sharon Graham, general secretary of Unite, is urging ministers to lift frozen income tax thresholds and deliver a “serious cut” to household energy bills. She says higher taxes on the wealthiest should fund help for working families.
The proposal comes from Labour’s biggest union backer ahead of the government’s October Budget. Graham has tied the demands to the pressure on employees whose pay rises can push them into higher tax bands.
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She also wants Andy Burnham to “raise taxes on Britain’s wealthiest” and use the proceeds to reduce living costs. Graham has described the freeze as a “stealth tax.”
The October decision is approaching. The basic and higher-rate bands are scheduled to remain frozen until 2031, meaning wage growth can increase tax liabilities without ministers raising the headline rates.
The plan combines relief for taxpayers with lower household energy costs. Graham argues that the money should come from people and businesses with greater capacity to pay, rather than from working households.
The proposed revenue package reaches beyond personal tax bands
Graham has identified four possible sources of funding. The first is a wealth tax on the richest 1 per cent.
She also supports aligning capital gains tax with income tax rates. That would change the treatment of gains from assets, while a levy on excess bank profits would target earnings above normal returns.
The final measure would restore corporation tax to its 2010 level. Together, the proposals cover personal wealth, investment gains, banking profits and company taxation.
Unite has presented the package as a way to pay for both the tax-band change and support with household bills. Its argument rests on shifting more of the cost toward wealth and corporate profits.
Unite’s figures show the estimated cost and scale of the plan
The union has attached estimates to several parts of its proposal. They include both possible revenue and the cost of reversing the freeze on the personal allowance.
| Proposal or figure | Unite’s estimate or stated amount |
|---|---|
| One-off 1% emergency wealth tax on the assets of the super-rich | £25bn |
| Aligning capital gains tax with income tax | £12bn per year |
| Unfreezing the personal allowance threshold | £12,570; up to £8 billion per year |
| Big energy suppliers’ banking in 2024 | Nearly £30 billion |
Graham said nurses, teachers and tanker drivers are being pulled into the 40 per cent higher rate as the bands stay frozen until 2031.
The energy argument is linked to the union’s claim that large suppliers banked nearly £30 billion in 2024. Unite has separately said its proposed one-off levy could raise £25bn, while changing capital gains tax could bring in £12bn per year.
Unfreezing the personal allowance at £12,570 could cost up to £8 billion per year, according to the union’s estimate. The figures describe Unite’s preferred policy choices, not measures already adopted by the government.
The October Budget tests Labour’s earlier tax commitments
The Labour Party’s 2024 manifesto pledged not to raise the basic, higher, or additional rates of income tax, National Insurance, or VAT. Graham’s proposal focuses on the frozen bands rather than an announced increase in those headline rates.
Changing the thresholds would still affect the point at which workers begin paying tax or move into a higher band. That makes the proposal politically distinct from raising the stated rates, while producing a direct cost for the Treasury.
The issue places the government under pressure before what has been described as a crunch Budget in October. Ministers would have to weigh the cost of lifting the freeze against the proceeds from any new taxes or levies.
Graham’s appeal also carries a distributional argument. She wants help directed toward working families while asking ministers to raise more from wealth, capital gains, banks and companies.
The union’s financial break with Labour adds pressure
Unite has long been one of Labour’s most powerful union backers, but tensions have grown over the party’s fiscal direction. The union had already slashed £580,000 in funding to Labour earlier in 2026.
That dispute gives the October intervention an internal political edge. Graham is not only calling for a policy change, but pressing Labour to choose how it funds relief for households.
Her earlier message was direct: the Budget should “end freeze on income tax thresholds.” The demand puts the union’s leadership at odds with any approach that leaves the current bands untouched through the next several years.
The proposed measures would also require decisions on the treatment of investment gains, bank profits and company earnings. None can take effect merely because the union has proposed them.
The freeze is scheduled to run through 2031
Unless ministers change course in October, nurses, teachers and tanker drivers will remain among the workers Graham says could be drawn into the 40 per cent rate as their earnings rise.
The government’s Budget will determine whether that schedule changes. Graham’s demand is for ministers to use the event to “end freeze on income tax thresholds,” while financing household support through higher contributions from the wealthiest and profitable businesses.
