Chancellor must come back to parliament with “Emergency Budget” to tackle cost of living crisis
- Working families are at “breaking point”, warns union body
- Emergency Budget needed to tackle “worst living standards crisis in generations”, says TUC
- TUC analysis highlights how pay and benefits will be “swallowed up” by bills and inflation
The TUC has today (Friday) called on the chancellor Rishi Sunak to come back to parliament with an “Emergency Budget” to tackle the spiralling cost-of-living crisis.
The union body says the measures announced at last week’s Spring Statement are “woefully inadequate” with millions of families at “breaking point”.
The call comes as households across Britain are hit today with crippling new energy bills as the price cap rises – and as pensions and benefits are uprated well below the rate of inflation.
Worst living standards crisis in generations
The TUC says there is there is a clear precedent for the chancellor coming back with fresh economic support.
After his Budget in March 2020 Rishi Sunak came back later that month and again in July 2020 with additional financial help for workers and businesses hit by the pandemic.
The union body says with the country facing “the worst living standards crisis in generations”, emergency action is needed again to help struggling families in the months and year ahead.
The TUC says the Emergency Budget must:
- Boost wages – increase the minimum wage to at least £10 an hour.
- Cut energy bills – with new grants paid for by a windfall tax on energy and oil company profits.
- Increase incomes – by providing a real boost to Universal Credit to cover rising bills, and restoring the pensions triple lock this year.
Pay and benefits swallowed up by bills and inflation
TUC analysis shows how pay, pensions and Universal Credit will be “swallowed up” by skyrocketing bills and prices.
Minimum wage: The TUC estimates that a full-time worker on the minimum wage will see their pay fall by £200 a year – in real terms – if inflation hits 8% as predicted.
While the minimum wage is set to rise by 6.6% this year, rises in the cost of living will leave workers worse off overall.
And with some forecasting inflation to reach double digits, this loss could be even greater
Energy bills: The TUC estimates that energy bills will rise at least ten times faster than wages this year.
From today the average gas and electricity bill will shoot up by 54%, but average weekly wages are set to rise by 5.3% in 2022 (according to the Office for Budget Responsibility).
Universal Credit: Since the Conservatives came to power in 2010 the standard Universal Credit/benefits payment has fallen by £44 a month in real terms.
And with Universal Credit to be uprated by just 3.1% from today, UC recipients face more real-term losses this year.
Pensions: From today the state pension will increase by 3.1%, instead of the 8.3% due under the triple lock formula, after the government decided to break the triple lock last autumn.
This will cost someone on the full new state pension £487 a year and someone on the full basic state pension £373 a year.
Need for action
Separate analysis from the Resolution Foundation estimates 1.3 million people will be pushed into absolute poverty, including 500,000 children, if the chancellor does not bring forward additional financial support.
And the Governor of the Bank of England has said that Britons face a “historic shock” to their incomes this year.
TUC General Secretary Frances O’Grady said:
“People shouldn’t be struggling to cover the basics.
“But millions of families have been pushed to breaking point by spiralling bills and soaring inflation.
“This is a living standards emergency.
“Last week’s Spring Statement was woefully inadequate.
“Rishi Sunak must come back to parliament and present an Emergency Budget. We need a proper package of economic support for families.
“Britain faces the worst living standards crisis in generations. We need an Emergency Budget to bring down energy bills and to boost pay, Universal Credit and pensions.”
The TUC also believes that the Chancellor should use an Emergency Budget to announce further support for public services and energy intensive businesses to help them deal with sharp rises in costs.
