UK (Parliament Politics Magazine) – Union boss Sharon Graham criticizes Chancellor Rachel Reeves’ Budget, saying frozen tax thresholds are a “stealth tax” that harms workers and breaks Labour promises.
As reported by The Telegraph, Labour’s key union backer launched a sharp attack on Rachel Reeves’ Budget, accusing it of breaking promises to workers.
What did Sharon Graham say about Rachel Reeves’ Budget and stealth taxes?
Sharon Graham, Unite’s general secretary, said Labour’s weakening of the Employment Rights Bill has left workers unable to “trust the party.”
She warned that her union members saw the “shameful stealth tax” persisting through frozen income tax thresholds.
Labour receives £1.5m annually from Unite, its second-largest union, which represents over a million members.
Ms Graham has previously warned of potential funding cuts, accusing the Labour Party of moving too far to the right.
She said,
“The Budget was the defining moment for Labour. The Chancellor’s stealth tax increase has hit ordinary workers such as health workers, engineers and tanker drivers while city bankers and billionaires have been left unscathed.”
The Union boss added,
“The stealth tax is a tax on workers pure and simple. A promise broken to workers.”
According to Ms Graham, the watered-down Employment Rights Bill, which would have allowed workers to sue for unfair dismissal from day one, proved promises to workers were broken after the Chancellor’s Budget.
She said,
“Workers were promised stronger rights, particularly the outright ban on fire and rehire, an end to zero hours contracts and day one right. Those promises which were campaigned on, have failed to be delivered. Broken. Workers have been left unable to trust Labour.”
Ms Graham stated,
“The broken promise on workers’ paying the price through higher taxes and the watering down of the ERB undoubtedly has left workers scratching their heads and asking what the hell is Labour doing? Are they Labour at all?”
She added,
“These latest decisions form part of a long list, which began with the attack on pensioner winter fuel payments, continued through proposed disability cuts, now stealth taxes and crucially underpinned by Labour’s failure to tackle the cost of living crisis.”
Ms Graham slammed net-zero ‘sham decisions,’ pointing to refinery shutdowns, and said Energy Secretary Ed Miliband clearly lacks the capacity for the role.
She said,
“The Budget was not a workers’ budget; it will result in workers paying more as income thresholds have been frozen. One in four workers, many of them Unite members, face paying higher tax rates in the future, while also struggling to keep their heads above water.”
The union boss continued,
“If the Chancellor thinks workers are not noticing the underhand continuation of this shameful stealth tax, she is wrong. It’s a tax on workers. It’s clear.”
How did the OBR reveal that Rachel Reeves actually had a £4.2bn surplus?
Sources within the Treasury reportedly briefed the press over several weeks, warning that the Government could face a public finance gap of up to £30bn. Those close to the Chancellor claimed the alleged £30bn hole warranted plans for a substantial tax rise.
In a letter to the Treasury Committee released after the Budget, Office for Budget Responsibility chairman Richard Hind said Ms Reeves never faced a shortfall exceeding £2.5bn.
He also confirmed that on 31 October, the OBR revised its forecast, telling the Chancellor that she had a £4.2bn surplus, despite a significant productivity downgrade.
Ms Reeves faces accusations of misleading the public, with Tory leader Kemi Badenoch calling for the Chancellor to be sacked, claiming she misled voters and was “bribing Labour MPs to protect her political future.”
Downing Street rejected claims that the Chancellor had misled the public or the markets, with the Prime Minister’s official spokesperson saying, “I don’t accept that.”
What is the UK’s Employment Rights Bill?
The Employment Rights Bill is a significant piece of UK legislation currently going through Parliament, representing the largest upgrade to employment rights in a generation.
The Bill was introduced in October 2024 and contains over 28 significant reforms to existing employment law. It is currently in its final stages in Parliament and is expected to receive Royal Assent before the end of 2025.
Key changes in the Employment Rights Bill include:
- Unfair Dismissal: Qualifying period cut to 6 months (2027)
- Statutory Sick Pay: Paid from day one; no earnings limit (Apr 2026)
- Fire & Rehire: Refusal of new terms now mostly unfair (Oct 2026)
- Zero-Hours Contracts: Right to predictable shifts and pay for cancellations (2027)
- Paternity Leave: Day-one entitlement (Apr 2026)
- Collective Redundancies: Maximum award doubles to 180 days’ pay (Apr 2026)
