THE GOVERNMENT must ignore profiteering oil lobbyists and help those hit hardest by rising energy prices, campaigners demanded today as new data warned living standards will fall for most British households due to the war in Iran.

Shocks in the energy market caused by the US war will leave the median working-age household £480 worse off over the next financial year, the Resolution Foundation said.

The think tank’s analysis found incomes would drop 0.6 per cent, defying the previously expected 0.9 per cent growth economists had predicted for this year.

Alongside campaigners, the Resolution Foundation demanded ministers offer targeted support to households most affected by the shock in energy markets.

However the think tank stopped short of urging the government to implement universal subsidies, claiming public finances are not strong enough.

Rachel Reeves recently said the government would not repeat the £70 billion subsidies for energy bills after a similar hike in prices following Russia’s invasion of Ukraine.

But despite claims the state cannot afford to help struggling households, the Chancellor indicated she would ease the windfall tax on North Sea oil and gas firms introduced in 2022 before the start of the war in Iran.

Resolution Foundation chief economist James Smith said: “De-escalation is certainly welcome but damage to household finances this year is to a large degree already done.”

End Fuel Poverty Coalition co-ordinator Simon Francis told the Star: “There is broad agreement that targeted support for struggling households is needed and that clean power and improved energy efficiency represent the long-term solution.

“But our new polling makes clear that the public understands the urgency of the here and now.”

Referring to Ms Reeves’s suggestion that she will axe the windfall tax, he said the Resolution Foundation’s findings are “a stark illustration of why this is precisely the wrong moment to hand the oil and gas industry a tax break.”

A poll published last week by Survation found over half of Brits (53 per cent) think ending the levy would be the wrong thing to do and 63 per cent believe the energy industry is profiteering from the war.

“The conflict has already harmed the living standards for typical households and four in 10 people in our recent polling said that they simply cannot afford the expected rise in energy bills this July,” Mr Francis added. 

“Two thirds of the public believe energy firms are already profiteering from the Iran conflict, and voters back the Windfall Tax by more than two to one.

“Ministers should be listening to that public consensus, using the receipts from the Energy Profits Levy to fund targeted support for those hardest hit, and ignoring the powerful oil and gas lobbyists calling for the tax to be ended just as energy profits are set to spike again.”

Stop the War convener Lindsey German said this was the “second big hike in the cost of living directly linked to wars – the first was the outbreak of war in Ukraine and now it’s Iran.”

She told the Morning Star: “We have always said that the more money is spent on promoting and funding wars, the more it’s going to hit working-class people at home.

“The poor must not be made to pay for war. The anti-war and labour movement demands welfare not warfare.”

TSSA general secretary Maryam Eslamdoust said Britain faces “a major economic crisis of Washington’s making at a time in which many people are already really struggling with the cost of living.  

“Not only should our government be carrying out the work of diplomacy to help find a solution to the conflict but it’s vital that ministers act without delay to take serious measures to help people here at home.”

She added: “The prime minister should also convene regular Cobra meetings examining the full range of measures which can help people with their bills and consider setting up a national cost of living task force.”

So far, the government has offered limited help to rural households which rely on heating oil and has given more powers to the Competition and Markets Authority to clamp down on price gouging.

Official ONS data has already shown that since the start of the war, drivers have been purchasing less petrol when filling up their cars.