Unite union boss Sharon Graham says Labour should ‘give Britain a break’ and borrow more to help ‘hurting’ workers
Union boss Sharon Graham has said she does not agree with Labour’s fiscal rules and the party should borrow more to invest.
Speaking to Sky News’ Sunday Morning With Trevor Phillips in an interview that will be broadcast in full today, the Unite general secretary said other countries with growing economies have a larger debt-to-GDP ratio than the UK, “so there is wiggle room”.
Rachel Reeves, the shadow chancellor, has promised to retain the Tories’ commitment that debt as a proportion of GDP must be on track to fall in five years if Labour win the election on 4 July.
She has ruled out borrowing to fund day-to-day spending, saying her focus will be on reforms to grow the economy.
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But Ms Graham said: “I don’t agree with Rachel Reeves in terms of what has been said about the plans on growth.
“If you look at other countries – in France, their debt to GDP is 112%. In America, where the economy’s growing, it’s 130% debt to GDP. Ours is around about 99%. We have wiggle room. Give Britain a break.”
The union leader said that workers “are literally hurting beyond anything that you could comprehend” due to the cost of living crisis.
She added: “We need the straitjacket off a little bit, get some wiggle room there.
“Borrowing to invest is not the same as other borrowing. It’s borrowing to invest.”
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Unite is Labour’s largest union donor but it has refused to endorse the party’s general election manifesto.
Ms Graham has been an outspoken critic of Sir Keir Starmer in the past, previously warning him not to “limp into Number 10” and calling on him to be bolder with his pledges, by nationalising energy, for example.
There has also been a row about his plans to phase out oil and gas licenses in the transition to clean energy, which Unite has called a “ban without a plan” and said threatens job losses.
And more recently Unite accused Labour of watering down its package of workers’ rights, saying the plans had “more holes than Swiss cheese”.
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Ms Graham’s concerns echo those of thinktanks which have said public services need far more investment than what any of the major parties have pledged during the election campaign.
Sir Keir has rejected that argument, insisting there will be no return to austerity despite his party’s commitment to “iron discipline” with the country’s finances.
He has previously defended his U-turn on big spending commitments, like nationalising utilities, by saying the policy became too expensive after the Tories damaged the economy.
In response to other criticisms from Ms Graham, he has insisted he is “not turning off the taps” on oil and gas while arguing his package of workers’ rights will boost wages and raise living standards.
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With less than two weeks to go until polling day, Labour is projected to win a historic landslide after 14 years out of power.
Ms Graham has said she still wants to see a Labour government in Number 10 but thinks the party’s proposals for the country don’t go far enough “after years of Tory neglect”.
The Labour Party has been contacted for comment.
You can watch the full interview with Sharon Graham on Sunday Morning With Trevor Phillips from 8.30am on Sky News.
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The UK economy grew by 0.1% between July and September, according to the Office for National Statistics (ONS).
However, despite the small positive GDP growth recorded in the third quarter, the economy shrank by 0.1% in September, dragging down overall growth for the three month period.
The growth was also slower than what had been expected by experts and a drop from the 0.5% growth between April and June, the ONS said.
Economists polled by Reuters and the Bank of England had forecast an expansion of 0.2%, slowing from the rapid growth seen over the first half of 2024 when the economy was rebounding from last year’s shallow recession.
And the metric that Labour has said it is most focused on – the GDP per capita, or the economic output divided by the number of people in the country – also fell by 0.1%.
Pic: Reuters
Reacting to the figures, Chancellor of the Exchequer Rachel Reeves said: “Am I satisfied with the numbers published today? Of course not. I want growth to be stronger, to come sooner, and also to be felt by families right across the country.”
“It’s why in my Mansion House speech last night, I announced some of the biggest reforms of our pension system in a generation to unlock long term patient capital, up to £80bn to help invest in small businesses and scale up businesses and in the infrastructure needs,” Ms Reeves later told Sky News in an interview.
“We’re four months into this government. There’s a lot more to do to turn around the growth performance of the last decade or so.”
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The sluggish services sector – which makes up the bulk of the British economy – was a particular drag on growth over the past three months. It expanded by 0.1%, cancelling out the 0.8% growth in the construction sector.
The UK’s GDP for the most recent quarter is lower than the 0.7% growth in the US and 0.4% in the Eurozone.
The figures have pushed the UK towards the bottom of the G7 growth table for the third quarter of the year.
It was expected to meet the same 0.2% growth figures reported in Germany and Japan – but fell below that after a slow September.
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The pound remained stable following the news, hovering around $1.267. The FTSE 100, meanwhile, opened the day down by 0.4%.
The Bank of England last week predicted that Ms Reeves’s first budget as chancellor will increase inflation by up to half a percentage point over the next two years, contributing to a slower decline in interest rates than previously thought.
Announcing a widely anticipated 0.25 percentage point cut in the base rate to 4.75%, the Bank’s Monetary Policy Committee (MPC) forecast that inflation will return “sustainably” to its target of 2% in the first half of 2027, a year later than at its last meeting.
The Bank’s quarterly report found Ms Reeves’s £70bn package of tax and borrowing measures will place upward pressure on prices, as well as delivering a three-quarter point increase to GDP next year.
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