Rishi Sunak is facing pressure to use his spring statement this month to launch an emergency support package in response to the war in Ukraine, with measures to increase humanitarian aid and aid to British households whose energy bills are rising.
Urging the Chancellor to announce a comprehensive package of measures in the mini budget due March 23, leaders of the TUC and Britain’s biggest unions said financial aid was essential to cushion the impact of the Russian invasion.
In a letter to Sunak seen by the Guardian, union leaders said a radical change in financial support was needed for the people of Ukraine as well as British families struggling with a cost of living crisis as the conflict drives up energy prices.
Wholesale petrol prices broke records on Friday, with the UK benchmark rising to 480p per therm, while petrol hit a new peak at the pump of 153p per litre.
Frances O’Grady, General Secretary of the TUC, said: “Workers in the UK will need to be protected against even steeper rises in gas bills due to the dispute. The Chancellor is expected to introduce grants to help reduce energy prices, roll out an emergency home insulation program and fund it with a one-off excess energy profit tax.
The intervention comes as analysts warn that the conflict in Ukraine could push inflation to the highest rates in three decades, if a sustained rise in oil and gas prices hits household bills.
Poverty campaigners have called on the government to increase the value of Universal Credit benefits by more than the 3.1% planned for April to avoid a sharp rise in hardship, alongside demands to revise the energy support package announced the month last.
Inflation hit 5.5% in January, the highest level since the early 1990s, while economists warned that the rate of cost of living increases could reach 8% this year after Vladimir Putin ordered the dispatch of troops to Ukraine, triggering an energy crisis.
The independent Joseph Rowntree Foundation estimates the planned reduction in benefits in real terms in April could push 400,000 people into poverty, at a time when the UK’s main unemployment support is already at a 30-year low after a decade of cuts and less than six months after the £20-a-week Universal Credit cut.
In their letter to the Chancellor, union bosses from the TUC, Unite, Unison, GMB, teachers’ unions and other leading groups said more needed to be done to protect working families from further rises in the prices of energy following the crisis.
He said more generous grants could be offered instead of a repayable loan of £200, Universal Credit could be increased more than planned, while the value of the warm house discount for poorer families could be increased and more funds made available to people who want to insulate their properties.
Amid soaring energy prices, unions have said a new 100% tax on “extra profits” made by UK-based companies from their stakes in companies backed by the Russian state that took advantage of the gas price crisis could be launched to help fund its recommended measures.
He said that would include profits made by companies like Shell and Vitol from their stakes in oil and gas fields in Russia in joint ventures with Kremlin-backed companies Rosneft and Gazprom. Several Western energy giants, including Shell and BP, have announced plans to sell multibillion-pound stakes in Russian projects since the outbreak of conflict in Ukraine.
Urging the government to continue all diplomatic efforts towards peace, union leaders said safe routes to the UK were needed for those fleeing the conflict and that changes to government legislation that would close the door to people fleeing war and threats to their lives had to be scrapped. They said funding for humanitarian aid to displaced people, including essential medical supplies, was also vital.
A government spokesperson said: ‘We recognize the pressures people are facing with the cost of living and are providing support worth around £20billion this financial year and next to help.
“This includes a £200 cut on bills this autumn and a £150 non-refundable cut on council tax bills, on top of the £12bn of support we already have in place. Energy price caps also continue to insulate millions of customers from global gas price volatility.
“We are also putting an average of £1,000 more a year in the pockets of working families through changes to Universal Credit and by raising the minimum wage by over £1,000 a year for full-time workers.”