Tax banks to give some households energy bill cut, unions tell Burnham
The TUC says a bank surcharge should be reversed - and estimates it would raise £9bn over four years.
**Tax banks to give some households energy bill cut, unions tell Burnham**
The leader of Britain’s trade union movement has urged Andy Burnham to bring in a "social tariff", funded by a bank surcharge, to help low and middle earners with their energy bills.
A social tariff is a bill discount tied to household income, and the TUC says it believes two-thirds of households could benefit.
The TUC says the bank surcharge, which was cut in 2023 from 8% to 3% by the then Conservative government, should be restored - and estimates that doing so would raise £9bn over four years.
TUC leader Paul Nowak said: "I think it will appeal to the prime minister. These are policies that make a difference in the real world and people can see a value in them."
In a wide-ranging BBC interview ahead of its annual congress in Brighton next week, the TUC general secretary said next month's Budget needed to show "the government is back in the service of the British people".
Although he said Burnham had made a good start as prime minister, he said he had a number of "asks" for the prime minister and the new Chancellor, John Healey.
At the top of his list is more support with energy bills. He said: "We need to drive down inflation – those energy bills are fuelling inflation.
"And millions of families up and down the country are worried about turning on their heating this winter."
Burnham has already offered "breathing space" - as he calls it – on the cost of living by temporarily scrapping VAT on electricity bills from October.
Nowak said the social tariff proposal would be popular with Labour MPs, while the Liberal Democrats and the Greens in England and Wales have also called for a windfall tax on banks.
But UK Finance, which represents major banks and lenders, has argued that higher levies would undermine the government's aim of delivering "growth in every postcode" and would hurt international competitiveness.
The group says UK banks already face a heavier tax burden than those in the US, for example.
So could the TUC's revenue-raising plan backfire and put finance jobs at risk?
Nowak is unconvinced. "I can't believe banks would leave the UK just because we are restoring the surcharge to where it was in 2023. Bank share prices have risen faster here than in New York," he said.
The TUC's calls for tax rises do not end with banks. Nowak argues that the UK has "a tax system that's good at taxing income but not good at capturing wealth".
Nowak proposes a windfall tax on social media companies and wants the government to align rates of Capital Gains Tax with income tax.
- who has advised Burnham – said recently that wealth taxes were "the last thing that should be happening if we want to see more growth".
Nowak replied: "With respect, I think he is wrong. I'm interested in a growing economy but a growing economy that works for everybody. It is right to ask those with broader shoulders to pay a fairer share."
He also says he does not believe the government will achieve re-industrialisation or meet its housing targets without making it easier to borrow for investment.
As Chancellor, Rachel Reeves adjusted her so-called fiscal rules on debt and borrowing, but Nowak said he believes the room this created for extra investment has not been fully used.
"John Healey should leave no stone unturned in allowing us to invest in our economy, in our public services and in our national security," he says.
"He should think about the flexibility he has got within those rules to make investments in the long term."
Nowak has another request for the government.
The home secretary has announced a policy change that would mean most migrants in the UK would have to wait 10 years rather than the current five before they can settle permanently. Some care workers may have to wait 15 years.
A consultation on the proposed measures closed six months ago, and the government has still not published its response.
Nowak – a grandchild of migrants, from Poland and Hong Kong - says: "We should think again not just for care workers but for workers right across the board.
"There are 111,000 staff vacancies in social care at the moment. It's important the rules aren't changed arbitrarily. I would hope and expect this and it needs to be the beginning of a grown-up conversation on immigration."
TUC delegates will debate immigration next week and are likely to repeat the call for the government to soften its changes for existing migrants.
Nowak says he thought it was right for Labour to change leaders after disastrous local election results in May, and he has been pleased to see a bit of a 'Burnham bounce' in the polls.
And the TUC chief warned the prime minister that he must deliver "meaningful change" if he wants to fend off an electoral challenge from the populist Right.
He says: "The onus is on Andy Burnham to show he can deliver what he promised.
"If he fails to do it, there are people with glib answers who will turn this country into a more divisive place."