Chancellor Rishi Sunak has come under pressure to scrap the upcoming national insurance hike in April and focus on providing “emergency support” for workers amid the conflict in Ukraine.
The warnings across unions, business groups and MPs come as the escalating conflict in Ukraine is expected to significantly worsen the cost of living crisis and trigger economic “stagflation”.
Trade unions and the TUC have penned a letter urging Sunak to “step up with new financial measures” to support both UK workers and Ukrainian refugees.
The demands include ensuring sanctions against Russia are effective, safety and humanitarian aid for displaced people and to protect working peoples in the UK against price rises in energy.
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“Working people in the UK will need protection from even steeper hikes in gas bills from the conflict,” TUC general secretary Frances O’Grady warned.
“The Chancellor should introduce grants to help with energy prices, roll out an emergency programme of home insulation, and fund it with a windfall tax on excess energy profits.”
O’Grady also urged the government to welcome refugees and “scrap their Nationality and Borders Bill, which will close the door to people fleeing war and threats to their lives.”
Sunak has also received pressure from the Federation of Small Businesses (FSB). The business group stated that without discounts on national insurance tax its members will suffer despite government promises of “levelling up”.
“The government’s levelling-up plans are now at serious risk. The chilling impact of national insurance hikes will hit the pay of those in regions that need help the most,” FSB national chair Mike Cherry said.
“Slamming small firms with a jobs tax hike will put the brakes on investment, upskilling and growth within communities most affected by the pandemic.”
Both Tory and Labour MPs have also urged Sunak to drop the national insurance rise, with calls intensifying as the economic context worsens abroad.
“Many are feeling their money already stretch less far. Our British businesses hold the key to our economic recovery – this is not the time to put yet another burden on them,” Shadow chancellor Rachel Reeves said.
Cabinet minister Jacob Rees-Mogg and chair of the Treasury select committee Mel Stride have also urged for the 1.25 percentage point to be scrapped.
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