Wealth tax could fund pay rise for staff providing vital services, says Union

A pay rise in line with inflation for workers providing essential services could be funded by tax increases for higher earners and the wealthy, says a report published today (Friday) by UNISON.

Independent economic analysis commissioned by the union identifies tax changes that would raise £30.58bn a year to tackle the cost-of-living crisis, including funding for public sector pay increases that keep pace with price rises.

This includes £10.1bn that could be raised from an annual 1% tax on household wealth above £5m, including second homes, buy-to-let properties and pensions, says UNISON.

In addition, the report says a 1p increase in both the higher and additional rates of income tax would yield £1.65bn. Increasing capital gains tax rates to match those for income tax would raise a further £8bn.

The measures are set out in a new report by UNISON, Together we rise, which outlines the disproportionate impact of rising bills on low-paid public service workers. It puts forward a fully costed plan to ease the burden of the crisis for lower and middle-income households.

The report also highlights public backing for a decent pay rise for public sector workers.

Three in five people (60%) agree wages for public sector workers should be increased either in line with (41%) or above (19%) inflation, according to a poll by YouGov for UNISON of more than 3,000 adults in England, Wales and Scotland.

Of these, more than half (54%) thought this should be funded by a new 1% wealth tax proposed by UNISON on incomes exceeding £5 million.

A fair pay rise is central to the union’s national cost-of-living campaign. Also called Together we rise, the campaign calls for urgent action to tackle the economic crisis.

The next stage of the campaign will take UNISON’s demands to the incoming Prime Minister, setting out the case for a public sector pay rise for nurses, police community support officers, school cleaners and other public sector staff.

The campaign also calls for a £15-an-hour minimum wage, which would take millions out of in-work poverty.

UNISON is urging the next PM to introduce a package of measures to protect low-paid workers against the pending recession and prevent public services losing yet more frontline staff.

In addition to a proper pay rise, solutions outlined in the report include the immediate reintroduction of the £20 a week uplift to universal credit payments which ministers removed last October, better access to affordable childcare and a review of HMRC mileage rates for staff who drive as part of their job.

The report findings also demonstrate that people feel the government is not doing enough to tackle the cost-of-living crisis.

More than a third (38%) of those polled by YouGov believe government measures to address the rising costs of living will not help them at all and the same percentage think they will help only slightly.

The disastrous effect of the cost-of-living crisis on public sector workers is laid bare in the report. More than 5,000 responded to a request from UNISON to share their experiences.

They have told of hardships such as doing without light at home because of rising energy bills, being unable to afford petrol to get to work and having to use buy-now-pay-later schemes to cover living costs.

Commenting on the report, UNISON general secretary Christina McAnea said: “The financial crisis is nothing short of a disaster for public sector workers.

“The real value of their income has plummeted, leaving them struggling to deal with rising prices. It’s clear that without help, many may never recover.

“The incoming Prime Minister must make it a priority to help people such as hospital porters, teaching assistants and other poorly paid public sector employees through the cost-of-living crisis.

“This isn’t the time for pay freezes or tax cuts. The government must put struggling families first and provide a wage rise in line with inflation or above.”