Sharon Graham, general secretary of Unite, one of Britain's largest unions, has called on Prime Minister Andy Burnham and Chancellor John Healey to raise the personal tax-free allowance ahead of the Autumn Budget on October 28. Speaking before a meeting at No 11 Downing Street, Ms Graham said it is wrong that people on low incomes are paying “eye-watering amounts of tax” due to the freeze on income tax thresholds imposed in 2022.
Union demands end to tax threshold freeze
Ms Graham urged the government to end the freeze on the £12,570 personal tax-free allowance, which was set in 2022 and has not risen since. She argued that if the threshold had not been frozen, it would now stand at over £16,000. “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. People at the lower end are paying eye-watering amounts of tax,” she said.
The basic rate of 20 per cent is paid on annual earnings between £12,571 and £50,270. The higher rate of 40 per cent is paid on earnings between £50,271 and £125,140. Ms Graham's comments come as Mr Healey prepares to deliver his maiden Budget on October 28, with unions pressing for immediate action to support working class families.
Healey pledges 'breathing room' for workers
Ms Graham also demanded extra government investment to “reindustrialise” the North of England. In response, Mr Healey told the unions that “tough choices” would have to be taken where necessary, but also expressed his commitment to give businesses and workers “a bit of breathing room” where he can.
The meeting comes amid political turbulence, with Home Office minister Sarah Jones addressing the Sky News leak of Sir Keir Starmer's failed fightback plan to stay in Downing Street. Some of the policies in the document have been announced by Starmer's successor Mr Burnham, who replaced him in the summer.
Political context and challenges
Ms Jones noted that “the context into which Andy Burnham became prime minister, turbulence globally, the war in Ukraine, Iran, the cost of living crisis - these challenges remain the same”. The union pressure on tax thresholds is set to be a key issue ahead of the Budget, with Unite calling for immediate changes to ease the burden on lower earners.
