Unite’s Sharon Graham Proposes Wealth Tax for Income Tax Relief

Unite’s Sharon Graham Calls for Wealth Tax to Fund Income Tax Relief

Unite general secretary Sharon Graham is urging the government to unfreeze income tax thresholds and reduce household energy costs. She proposes that a wealth tax on the richest individuals, alongside higher taxes on capital gains and corporations, should fund these measures. This call comes as the current freeze on income tax bands, set to last until 2031, risks pushing more workers into higher tax brackets due to wage increases.

The union’s proposal aims to provide financial relief to working families by shifting the tax burden towards those with greater financial capacity. Graham has described the freeze as a “stealth tax” that unfairly impacts ordinary workers. The upcoming October Budget presents a critical opportunity for ministers to address these concerns and potentially alter the current tax trajectory.

Proposed Funding Sources for Tax Relief

Sharon Graham has outlined four primary avenues for generating the necessary funds to support working families and lower energy bills. The first and most prominent suggestion is a one-off 1% wealth tax specifically targeting the wealthiest 1% of the population. This measure is intended to directly tap into the assets of the super-rich.

In addition to the wealth tax, Unite advocates for aligning capital gains tax rates with income tax rates. This change would alter how profits from selling assets are taxed, potentially increasing government revenue. Another proposed source is a levy on excess bank profits, targeting earnings that exceed normal market returns. Finally, the union suggests restoring corporation tax to its 2010 level, which would increase the tax paid by companies.

Financial Estimates for Unite’s Proposals

Unite has provided estimates for the potential revenue and costs associated with its proposed policies. A one-off 1% emergency wealth tax on the super-rich is estimated to generate £25 billion. Aligning capital gains tax with income tax is projected to bring in £12 billion annually.

The cost of unfreezing the personal allowance, currently set at £12,570, is estimated to be up to £8 billion per year. The union also points to the significant profits made by large energy suppliers in 2024, which they claim were nearly £30 billion. These figures illustrate the scale of the financial resources Unite believes can be mobilized to fund their proposed relief measures.

Impact of Frozen Tax Bands on Workers

The freeze on income tax thresholds, scheduled to remain in place until 2031, means that as workers’ wages increase, they can be pushed into higher tax brackets without any change in the headline tax rates. Graham highlights that this situation is affecting essential workers like nurses, teachers, and tanker drivers, who may find themselves paying a higher percentage of their income in taxes. This is particularly concerning as wage growth is often necessary to keep pace with the rising cost of living.

The union’s analysis suggests that this freeze acts as a hidden tax, increasing the overall tax burden on individuals as their earnings rise. By unfreezing these thresholds, the government could provide direct financial relief to a broad segment of the workforce, allowing them to keep more of their earned income.

Political Context and Labour’s Commitments

The Labour Party’s 2024 manifesto included a pledge not to increase the basic, higher, or additional rates of income tax, National Insurance, or VAT. Sharon Graham’s proposal focuses on adjusting the thresholds at which these rates apply, rather than increasing the rates themselves. This distinction is politically significant, as it allows for tax relief without directly breaking the manifesto commitment on headline rates.

However, changing the thresholds would still have a direct financial impact on the Treasury. The upcoming October Budget will test the government’s approach to these tax policies, requiring them to balance the cost of providing relief against the potential revenue from new taxes or levies. Graham’s appeal emphasizes a distributional argument, advocating for support for working families funded by increased contributions from wealth and corporations.

Tensions Between Unite and the Labour Party

Unite is a major financial backer of the Labour Party, but recent tensions have emerged regarding the party’s fiscal policies. Earlier in 2026, the union significantly reduced its funding to Labour by £580,000, signaling a disagreement over the party’s direction. This financial break adds an internal political dimension to Graham’s current demands.

Graham’s call for a wealth tax and other measures represents a push for Labour to adopt specific policies for funding household relief. The union’s leadership is advocating for a clear choice on how to finance tax and energy support, putting pressure on the party to consider its fiscal strategy. The proposed measures would necessitate decisions on various tax policies, including those related to investment gains, bank profits, and corporate earnings.

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