‘Give people hope’: TUC urges government to invest in UK growth and services

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UK unions are urging the Labour government to step up its ambitions for investment in industry, infrastructure and the public sector workforce, warning that the spending announced so far was no more than a “down payment” on the sums needed to rebuild the economy. 

Paul Nowak, general secretary of the Trades Union Congress, said the body would be urging chancellor Rachel Reeves ahead of October’s Budget to “set out where it is going to get the investment to begin the job of repairing our public services”. 

“I’m under no illusion. I think the chancellor has got a really difficult job in October. But I’m still optimistic that she can plot a course forward that gives us the ability to invest in our economy, invest in public services and give people . . . that sense of hope,” he told the Financial Times in an interview ahead of the TUC’s annual gathering of its 48 member unions. 

Unions, who helped fund Labour’s election campaign, are leaning on the chancellor to look for new sources of tax revenue to fill what Reeves has described as a £22bn “hole” in the public finances, rather than squeezing spending. 

Prime Minister Sir Keir Starmer’s call for “those with the broadest shoulders” to bear the brunt of fiscal retrenchment was “the right aspiration”, Nowak said, calling for capital gains to be taxed at the same rate as income, and for online retailers to pay the same as those on the high street. 

He added that while the £7bn announced in July for a National Wealth Fund was “an important downpayment”, it could not be “the limit of the government’s aspirations in terms of investment”, whether in physical infrastructure, skills or the UK’s industrial base. 

The TUC is also calling for the government to bring together unions and employers in a year-long push to tackle a “workforce crisis” in the public sector — by forming a commission to address concerns over pay, workload, productivity and the rollout of new technology.

“We know the government can’t flick the switch and public services are going to be fixed overnight, but this is about setting the direction of travel,” Nowak said. 

Following waves of public sector strikes, Reeves had pressed the “reset button” in the government’s relations with unions, and given workers “a fresh piece of paper to start off with” by accepting the recommendations of the public sector pay review bodies in full, he said. But it was still only “a first step” to solving a long-term recruitment and retention crisis. 

The TUC estimates that even after the latest pay awards, average pay across the public sector will still be worth £260 a year less in real terms than in 2010 — with much bigger shortfalls for some experienced workers such as nurses, midwives and teachers.

“I don’t think it’s given the green light to more industrial action,” Nowak said of Reeves’ decision to approve the pay awards. “I think it’s the green light to getting round the table and finding a positive way forward.” 

However, the backdrop of tight public finances would make it all the more important for Labour to deliver on its promise of a sweeping overhaul of workers rights, Nowak argued. 

Labour’s so-called “plan to make work pay” — a package of reforms to employment law designed to give people more security and control over their terms of work — “doesn’t cost the government a penny, but it makes a tangible difference to millions of people”, Nowak said. 

Businesses raising the alarm over the potential impact of the reforms were making “exaggerated” claims over changes that were widely backed by voters of all political persuasions and would level the playing field for good employers, he argued. 

Nowak said that while much of the detail of the changes had yet to be thrashed out in consultation with business and unions, he was confident Labour would meet its commitment to legislate within 100 days of taking office — including on an expansion of trade union rights.

While he would not “go to the barricades” for the repeal of anti-strike laws dating back to the 1980s — which some union chiefs have demanded — he said greater rights for union representatives to enter workplaces were “commonplace” across Europe and would simply be “dragging us into the mainstream of employment law”.

“I don’t think decent employers have anything to fear from unions being able to talk to staff . . . it’s about making sure you get economic growth that actually benefits working people.”