Now unions tell Labour to spend £50BILLION on public sector 'pay restoration' to undo more than a decade of Tory cuts amid fears of massive Budget tax rises

Unions will demanding Labour spend as much as £50billion on boosting pay for tens of thousands of public sector workers,raising new fears of tax hikes.

The hardline Public and Commercial Services Union (PCS) will use September's TUC conference to pressure the government to back a massive splurge of taxpayers' money on 'pay restoration'.

It wants the labour movement to back its call for above-inflation wage rises to offset 14 years of cuts to real-terms pay cuts under the Tories.

In a motion to the conference the PCS argues that 'pay levels have fallen by an average of 1.5 per cent per year since 2011' and 'pay restoration in the public sector should be a key feature of our campaigning with the new government'.

Restoring pay levels would mean a 20 per cent increase,with economists estimating that each percentage-point increase would cost taxpayers £2.5billion.

Matt Wrack,the FBU leader and TUC president,told the Financial Times he expects the motion to pass at the event in Brighton,which starts on September 8.

It will raise new fears of tax rises in Rachel Reeves' first Budget as Chancellor,coming after major deals to end strikes by rail staff and junior doctors.

In a motion to the conference the PCS argues that 'pay levels have fallen by an average of 1.5 per cent per year since 2011' and 'pay restoration in the public sector should be a key feature of our campaigning with the new government'.

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She oversaw a £3.1billion surge in Government borrowing last month, £1.8billion more than a year ago and the highest July borrowing since 2021.

The total for July was also £3billion more than predicted by the Office for Budget Responsibility (OBR) and higher than the £1.1billion most economists expected.

Since taking over at the Treasury,Ms Reeves has accused the Tories of leaving behind a £22billion 'black hole' in the public finances when they exited power.

But the Conservatives have claimed the Chancellor is using dire warnings about the state of Whitehall's books as cover for long-planned tax rises.

There were fresh reports today that Ms Reeves is considering raising inheritance tax and capital gains tax at her Budget on 30 October in order to fill her coffers.

Ms Reeves has previously pledged not to raise income tax,national insurance or VAT,which has prompted speculation she could look to hike other levies.

In action blamed on the £22bn 'black hole',the Chancellor has already announced the controversial scrapping of winter fuel payments for millions of pensioners.

And she also has axed a series of infrastructure projects,while Labour plans to impose VAT on private school fees in January.

According to the FT,Ms Reeves intends to hike social rents by more than inflation for the next decade.

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