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Sir Keir Starmer must make 2025 a “year of delivery” for workers if he is to overcome a shaky start in Downing Street and see off the threat of the populist right, the head of the country’s union movement has warned.
Paul Nowak, general secretary of the Trades Union Congress, said the prime minister needed to set out a road map to “rebuild and repair” public services in a newly launched spending review in order to persuade voters that a Labour government could improve their lives.
“Have there been mis-steps? Of course,” Nowak told the Financial Times, pointing to the decision to axe pensioners’ winter fuel payments, and rows over freebies accepted by Starmer, as mistakes that had taken the shine off the new government’s image.
“The millions of people we represent . . . are going to want to see real improvements in their working lives,” he said. “2025 has to be a year of delivery . . . Labour have got to take that thumping majority we got in July and demonstrate the difference that mainstream politics can make.”
Nowak, whose TUC represents 48 member unions, was speaking after a month of bad economic news for ministers.
Recent data has shown growth in GDP stalling, inflation reviving, the job market softening and public finances under even more strain than already thought.
But he rejected the argument that the weaker economic backdrop made it risky to press ahead with tax increases that will hit employers shortly before new flagship legislation awards sweeping new rights to workers.
Higher taxes were funding a cash injection into the NHS and to schools that would make “a real, tangible difference to people’s lives”, he said, adding that by the end of 2025, it needed to be clear that “people’s lived experience of public services is better”.
Growth would “come through next year” as the Budget decisions took effect, he said, but added: “No one cares if GDP is going up, if living standards are falling . . . That’s not a measure of economic success. The measure of economic success is: how much do I earn and does that buy me more, and allow me to have a better life for me and my family?”
Allies of Starmer have said money will be allocated in the spending review according to priorities he set out in his “plan for change” this month, which focused on living standards, homes and infrastructure, hospitals, early-years education, green energy and crime.
Nowak, in post since 2022, said the threat of a new trade war following Donald Trump’s re-election as US president made it all the more important for Britain to boost ties with the EU, and put “cold, hard cash” into its industrial strategy — while stipulating that business receiving subsidies must support jobs.
Rightwing populist politicians were exploiting the situation in Port Talbot, where steel workers face mass redundancies, to “drive a wedge in the community”, he said.
The arguments of the Reform UK party — which has just five MPs at present but hopes to win hundreds of council seats at local elections in May — were finding an audience after years of stagnating living standards, he added.
But businesses’ complaints about rising labour costs and squeezed profits should be “taken with a pinch of salt”, he said, calling on ministers to “face down” both the outcry over the increase in payroll taxes, and any attempt to water down the employment rights bill in parliament.
“That legislation needs to do what it says on the tin. It needs to make work pay,” he said.
Unions are reasonably confident that the government will resist pressure to weaken its reforms to workers’ rights, and that employers will start changing their practices as soon as they see the final shape of the legislation — even before it takes effect in the coming years.
But Nowak admitted to “frustration” with the debate over public sector pay. Ministers’ refusal to fund awards higher than 2.8 per cent in 2025-26 has provoked angry reactions from unions, who have warned of the potential for fresh strikes.
Nowak said that with or without walkouts, pay awards at that level — barely outpacing inflation — would not help resolve a recruitment and retention crisis in hospitals and schools.
But he also urged ministers to begin a “broader, strategic conversation” with public sector staff who wanted to help shape the way services were delivered as ministers looked for productivity gains.
“Headline pay is one thing, workload is another set of issues. You’ve got people crying out in the NHS for flexible working who can’t get it,” he said. “This is the sort of longer-term conversation we should be having with government about public service reform.”