Labour’s top financial backer, the union Unite, has sharply criticized Rachel Reeves, claiming that her recent Budget has eroded voter trust by reneging on commitments to the workforce.
Sharon Graham, the head of Unite, expressed dismay over the dilution of the Employment Rights Bill and the imposition of stealth taxes on everyday citizens.
During Wednesday’s announcement, the Chancellor revealed plans to increase taxes to finance a rise in the welfare budget, which includes abolishing the two-child benefit cap.
Following this, accusations have emerged suggesting she misled the public about the country’s financial situation prior to the Budget reveal.
In a surprising disclosure, the Office for Budget Responsibility announced yesterday that the Chancellor had been informed months earlier that there was no £20 billion deficit.
Despite this, Ms. Reeves continued to present bleak forecasts concerning the economy before her Wednesday announcement.
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 Labour party – as many face paying higher taxes.
Rachel Reeves pictured outside 11 Downing Street in London on Wednesday before her Budget announcement
Unite boss Sharon Graham (pictured) criticised the watering-down of the Employment Rights Bill and the decision to hit ‘ordinary’ people with stealth 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.
‘Those promises, which were campaigned on, have failed to be delivered. Broken. Workers have been left unable to trust Labour,’ Ms Graham said.
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.
At the end of October, Reeves was told by the OBR that she was sitting on a £4.2billion surplus
Ms Reeves has this week faced calls to be sacked, following accusations she ‘lied’ about the budget.
In the days leading up to her financial statement, the Chancellor warned that the OBR was downgrading productivity while also blaming everything from Brexit to Tory austerity and Donald Trump for a ‘worse-than-expected’ outlook.
Neither she nor Treasury sources did anything to dispel claims of £30billion deficits that she would have to fill.
Yesterday, however, in a highly unusual action, the OBR published a letter revealing it had told Ms Reeves as early as September 17 that the downgrade was more than offset by a rise in tax revenues.
At the end of October, the watchdog then told her that she was sitting on a £4.2billion surplus – and on course to meet both of the Government’s fiscal targets.
But just four days later, the Chancellor gave a highly unusual press conference in Downing Street in which she spoke of the ‘challenges’ she faced ahead of the Budget.
She hinted that she would have to breach Labour’s manifesto promises not to increase income tax – a suggestion she repeated in an interview on November 10.
The OBR letter sparked fury, with the Chancellor accused of ‘misleading’ the public and markets.
Conservative leader Kemi Badenoch has called for Ms Reeves to be sacked, saying that ‘honesty matters’.
She said: ‘For months, Reeves has lied to the public to justify record tax hikes to pay for more welfare.
‘Her Budget wasn’t about stability. It was about politics: bribing Labour MPs to save her own skin. Shameful.’
The Tories have also launched a petition calling for Ms Reeves to be removed from her post.
The party has set up a website, SackReeves.com, for people to register their disapproval of the Chancellor.
The petition reads: ‘Rachel Reeves wanted her Budget for Benefits Street so badly, she lied about the OBR’s forecasts.
‘All so she could justify breaking her promise not to raise tax on working people. Labour’s lies are costing us more and more.
‘Sign the petition to make Keir Starmer do the right thing and sack Rachel Reeves.’
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.’
