UK Budget 2026: Unions push for tax threshold changes

Major UK trade unions affiliated with the Labour Party are holding high-level meetings with political figures including John Healey this week to push forward key policy demands ahead of next month's crucial government Budget announcement.

Unite, the country's second-largest union, has formally demanded the reversal of a policy that freezes tax thresholds, a measure originally put in place until 2031. Under the current rules, the basic income tax rate of 20% applies to earnings between £12,571 and £50,270, while the higher rate of 40% applies to those earning between £50,271 and £125,140. Unions argue that failing to uprate these thresholds with inflation drags lower-paid workers into taxation and pushes public sector workers, such as senior nurses and teachers, into higher tax brackets.

In addition to income tax thresholds, Unison, the largest union in the UK, is pressing the Treasury to increase taxes on major technology corporations. The union proposes using these revenues to finance public sector investments and accelerate the transition toward green energy, alongside commissioning a formal study on shifting the national tax burden from income toward wealth.

Meanwhile, the GMB union has urged the government to approve new oil and gas fields in the North Sea and provide confidence-building measures for the domestic construction industry. GMB leader Gary Smith highlighted that the country currently stockpiles half a million bricks—enough to build two towns the size of Kidderminster—while factories face mothballing due to sluggish housing development programmes.