New TUC general secretary Frances O'Grady challenged the Labour Party at the weekend to get tough on tax evaders if it wins the next general election.
She warned that millions of public-sector workers feel "demoralised and angry" and Labour must support jobs and growth.
During the discussion on How Should Labour Govern? at the Fabian Society's New Year conference Ms O'Grady (pictured) said the party should not be afraid to take on battles against the likes of private companies such as G4S, A4E and Atos.
Shadow chief secretary to the Treasury Rachel Reeves acknowledged the "growing inequality" in Britain under the coalition.
The Labour MP for Leeds West said that the coalition were "the ones with the bulldozer" and it would be Labour's job to conduct a salvage operation, warning that if the Tories win another term "things will get much worse."
She stressed that companies need to publish the amount of tax they pay to increase transparency and inform action to clamp down on evasion.
Foreign Minister Alistair Burt's admission that the Cameron government has "supported" a survey of attitudes to US drone strikes in Pakistan's tribal areas amounts to a tacit admission of British involvement.