The head of Unite, Sharon Graham, has put immediate pressure on the Labour government to change its fiscal rules so it can borrow more to invest in infrastructure and public services.
The union leader told the chancellor, Rachel Reeves, that people “haven’t got time to wait for growth” after Labour put boosting economic output at the heart of its plans to repair the country.
“You’re going to have to borrow to invest. You haven’t got time to wait for growth. People are literally hurting out there … and our crumbling public services need money,” she said.
Reeves has said the government will borrow only to invest within its fiscal rules, and that overall public debt should fall year-on-year as a share of gross domestic product by the fifth year of official forecasts.
Economists have criticised the rolling target, which is always five years away, arguing that while loose, it is also binding, so it makes increasing capital and current spending difficult.
If Labour fails to meet its plan to have the fastest sustainable growth in the G7 it will be forced to make decisions over tax rises or further spending cuts.
Graham told the BBC’s Sunday with Laura Kuenssberg programme that Gordon Brown’s original fiscal rules had already changed nine times over the years and “when you change them you have more opportunity”.
She said Labour would have to make “different choices” to break austerity and should not be choosing between children and pensioners, instead focusing on huge societal inequality, in which the richest families in Britain are worth £500bn, the same as 33 million people.
“We’re going to have to borrow to invest. That’s not the same as borrowing for anything else, borrowing to invest is absolutely the right thing to do,” she said.
“We’re also going to have to look at things like our crumbling public services and say ‘how are we going to deal with this?’ We can’t just allow that to wait for growth. We won’t get growth in time. We’re not going to be able to get that quick enough and people will not wait for that delivery.”
Graham, an outspoken critic of some of Labour policies, suggested she had no plans to hold back now the party was in power. “I’m glad we have a Labour government, but I am the leader of a trade union and my main focus is jobs, pay and conditions for workers,” she said.
“So I am either going to be seen as a critical friend or a pain in the proverbial, whichever way they want, because I’m going to hold their feet to the fire over this.”
The business secretary, Jonathan Reynolds, told Kuenssberg that job guarantees would be part of the negotiations between the government and the steel giant Tata about its Port Talbot site.
Tata has shut down one of two blast furnaces at its biggest plant under its plans to switch to a greener form of production. The second blast furnace is scheduled to be shut down in September.
Reynolds also said the UK should explore ways to improve trade relations with the EU, after the Irish prime minister, Simon Harris, said there could be space to work more closely on various post-Brexit issues. He insisted, however, that a return of freedom of movement with the EU was not on the table.
