Labour must ditch 'phoney fiscal rules' and borrow to invest in public services, says boss of UK's largest trade union

19 June 2024, 20:18

Labour must ditch 'phoney fiscal rules' and borrow to invest in public services, says boss of UK's largest trade union
Labour must ditch 'phoney fiscal rules' and borrow to invest in public services, says boss of UK's largest trade union. Picture: Alamy/LBC

By Christian Oliver

Labour must ditch its ‘phoney fiscal rules’ and borrow more money to invest in public services if they are elected to power at the general election, the boss of the UK's largest trade union has warned.

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Sharon Graham, the general secretary of the Unite Union, told LBC's Andrew Marr that there needed to be an "injection of cash" to protect public services, despite Labour's manifesto setting out very few giveaways.

"They're going to have to find that money from somewhere," Ms Graham said.

"They talk about growth, and I think they've tied themselves into these phoney fiscal rules that effectively we make. We're now straitjacketed in because if you borrow to invest, that is a different type of debt."

"I think that we've sort of boxed ourselves in," she said.

"I'm really clearly saying to Labour, look, you need to borrow for some of the things that we need to do. We need to change our fiscal rules. We’re in crisis."

Graham has been somewhat critical of Labour under Sir Keir Starmer's leadership. The union boss last month warned that it may divert election funding earmarked for the party if it did not boost its policy protecting workers' rights.

'It's saying to a Labour government: 'you've got one shot to get this right.''

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Continuing her critique of Labour's fiscal policy, Ms Graham said: "We are almost creating our own problems by committing to these phoney fiscal rules."

"We do not have to do this. Let's loosen that a little bit, give people a break - because if we get to the end of the next parliament and people don't feel different, I think we could be in a very dangerous situation where people start looking at other areas.

The Unite chief said Labour needed to do more for workers to prevent the electorate "flip-flopping to the far-right" in five years time, when the next general election is scheduled.

Ms Graham said polls and predictions that Labour could win a supermajority should act as a "warning" that voters are "less tribal" with their voting intentions than they have been in the past. She argued this meant Labour needed to do more for workers to retain power, should it return to government at the next election.

She said she thought it was no coincidence that Nigel Farage unveiled his manifesto in Merthyr Tydfil - one of the poorest towns in the UK.

Ms Graham continued: "The reality here is that workers are suffering. Communities are suffering: 20 per cent of workers are going to food banks. We are in an absolute crisis."

Watch Again: Andrew Marr speaks to Unite's Sharon Graham | 19/06

She argued that Labour "paid for the 2008 crash" and bankers’ bonuses were later reintroduced.

"Covid: they went out and some of those workers died in Covid and then they get repaid by being absolutely on the breadline now. Unless somebody changes that, that's abhorrent to me."

Responding to polls suggesting that Labour could be on course for a supermajority at the upcoming election, Ms Graham said: "I think it's good that the polls are where they are. Of course, I want a Labour government. I've been very clear about that. But I also think that it shows a warning sign.

"When you think just five short years ago, in 2019 the Tories won by an 80-seat majority. They won by an 80-seat majority.

"And that looks as though we don't know yet, but that looks as though it could be absolutely wiped out.

"And I think the reason for that is that workers and communities are saying we've had enough crumbling public services, people going to food banks, who are working a whole range of things.

"What they've said is we're now going to vote with our feet, but I think it also means that voters are less tribal. I think that they are likely to move their votes much more than they did before."

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