Labour’s biggest union donor has launched an attack on Rachel Reeves, saying voters are no longer able to trust the party as her Budget broke promises to workers.
Unite boss Sharon Graham criticised the watering-down of the Employment Rights Bill and the decision to hit ‘ordinary’ people with stealth taxes.
On Wednesday, the Chancellor announced she would be raising taxes to pay for an increase to the welfare bill, including the removal of the two-child benefit cap.
And she has since been accused of ‘lying’ to the public in the run-up to the Budget over the state of the country’s finances.
In an extraordinary move, the Office for Budget Responsibility yesterday revealed that the Chancellor was told months ago that there was no £20billion black hole.
Yet Ms Reeves continued to make grim warnings about the state of the economy ahead of Wednesday’s statement.
She even opened the door to an income tax hike in an unprecedented early-morning speech, all while plotting a mammoth welfare giveaway.
Now, Ms Graham has said that Unite’s one million members are no longer able to trust the party – as many face paying higher taxes.
The organisation is the second-largest union affiliated to Labour and donates £1.5million from its membership fees to the party every year.
Ms Graham has previously threatened to pull the plug on the funding on the basis Labour is drifting too far to the right.
She told The Telegraph: ‘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.
‘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.’
Ms Graham also criticised the watering down of the Employment Rights Bill that would have given employees the right to sue for unfair dismissal from day one.
She said workers had been promised greater protections by Labour but these had not been delivered.
Instead, when the Chancellor stood up at the despatch box on Wednesday, she announced an eye-watering £30billion package of tax rises.
She had already U-turned on the hints of income tax increases – if they were ever seriously considered – but only after the fact they were not happening was leaked to the Financial Times.
The day after the volte-face, senior government figures were still privately insisting there was a £20billion black hole, suggesting a new OBR report had offered up an extra £10billion.
In an interview with the Guardian before the OBR’s letter was published, Ms Reeves confirmed that she did look at hiking income tax – claiming ‘that was a responsible thing to do, because we didn’t know the size of the downgrade, the productivity’.
The OBR letter sparked fury, with the Chancellor accused of ‘misleading’ the public and markets.
Shadow Chancellor Sir Mel Stride also called for Ms Reeves to quit, telling the Daily Mail: ‘Rachel Reeves’ broken tax promises and the briefing debacle in the run-up to the Budget have had real consequences for our economy and for people across the country.’
Reform deputy leader Richard Tice urged the Chancellor to ‘consider her position’, adding: ‘She has deliberately crashed the economy.’
Julian Jessop, of the Institute of Economic Affairs, a free market think-tank, branded the ‘scale of deceit’ from Ms Reeves as ‘shocking’.
‘The prolonged uncertainty ahead of the late Budget had clearly harmed the economy,’ he said.
‘But confirmation that the markets and the public had been misled throughout the process will do more permanent damage.
‘Some observers – myself included – have spent weeks pointing out the holes in the narratives coming out of the Treasury and No 10.’
