Labour will be “decimated” in the upcoming local elections and should “hang their heads in shame” over the handling of the Birmingham bin strike, Unite’s general secretary has said.

In a speech to refuse workers near a waste depot in Tyseley on Thursday, Sharon Graham said working people were moving away from Labour in droves and called on the party to “wake up and smell the coffee”.

“We are in one of the most significant strikes in decades,” she said. “An attack from a Labour council under a Labour government. Labour should hang their heads in shame. They are an absolute disgrace.”

Refuse workers in Birmingham began their industrial action over pay and conditions in January last year, and it escalated into an indefinite all-out strike two months later. Unite argued changes to the city’s waste collection service would cost some members £8,000 a year, a figure the council has disputed.

The strikes, which could last beyond September, will be a key issue in Birmingham in the May local elections, when all 101 council seats are up for grabs.

Graham said: “In May, the polls tell us that Labour will be decimated. And it’s not hard to see why. This is England’s second city … Look at the mountains of waste and recycling still piling up,” she said.

In an interview with the Guardian, she added: “I think it would be impossible to see a situation where this didn’t have an effect on the May elections … It’s a lot less tribal the way that people vote.”

One year on from the start of the all-out strike, Unite announced it had voted to cut its affiliation fee to Labour by 40%, or £580,000, over its handling of the bin strikes.

The union was fined £265,000 earlier this week after its members were found to have breached an injunction which prohibited blockades of waste lorries at depots. Graham said the fine would be paid for by the cut to Labour’s affiliation fee.

Formal negotiations between the council and Unite broke down in July last year and have not resumed.

The council said it had “reached the absolute limit of what we can offer”, citing the risk of further equal pay claims being made if it acceded to the union’s demands.

Unite, however, claimed government-appointed commissioners – who were brought in to oversee the council’s financial recovery after it declared bankruptcy in 2023 – had blocked an agreement between the union and the council that would have resolved the dispute.

Graham said she had spoken to Keir Starmer on Wednesday about the dispute and acknowledged “there is a willingness for this to be resolved”.

“Obviously saying it and doing it are two different things,” she said.

Speaking at the protest, Wendy Yarnold, 52, who has been working in Birmingham’s refuse collection service for 10 years, said she had joined the strike because she was facing a pay cut of £8,000 a year.

“None of us can afford it, not with the cost of living, the bills going up, council tax going up,” she said. “Potentially they’re going to make me homeless.”

Jimmy, an agency worker, said had been stressful to be on strike for such a long time. He said he had previously been a Labour supporter, but would be voting Reform in the local elections. “Labour, they don’t stand up for the working person any more,” he said.

The council’s leader, John Cotton, said it had been in contact with the union to “end this stalemate” and that he wanted to “get round the table with Unite as soon as possible”.

“But they need to be realistic,” they said.

The council had “offered pay protection, new roles and training opportunities”, he said.

“My message to the waste workforce is simple. We want you to join us in delivering a new, better service for the people of Birmingham.”

A Labour spokesperson said: “The Labour party is proud to be funded by our dedicated party members, affiliated supporters, trade union members and party donors.

“The Labour government is delivering the biggest upgrade to workers’ rights in a generation to address low pay, insecure work and poor working conditions, which will benefit 15 million workers across the country.”