MP’s on the Works and Pensions Committee has pressed Chancellor Kwasi Kwarteng to honour the commitment made by the former Chancellor, Rishi Sunak, to uprate benefits in April 2023 in line with the September 2022 CPI rate.
When questioned in Parliament, the Chancellor stated that the Government “will make announcements about that in due course,” sparking doubts about the likelihood of uprating.
These doubts have continued today with the Prime Minister saying that “no decision has been made” on whether benefits will rise in line with inflation next year.
Penny Mordaunt, Leader of the House of Commons, told Liz Truss that it “makes sense” for benefits to rise in line with inflation while Damian Green, the former work and pensions secretary, said Liz Truss has “probably not” got the support in the House of Commons to prevent an inflation-linked rise to benefits.
Hon Stephen Timms MP, Chair of the Work and Pensions Committee, said:
“Prices are continuing to rise at unprecedented rates and inflation is unlikely to abate soon. People on the lowest incomes are increasingly struggling to get by on the essentials and, because of the jump in inflation between September 2021 and April 2022, benefits claimants’ incomes have fallen sharply in real terms this year. The former Chancellor assured Parliament there would be a “catch up” next April.
The Chancellor must honour his predecessor’s pledge to uprate benefits in the usual manner, in line with inflation. Without it, countless families risk being pushed further into crushing poverty as they are forced to stretch the same money over higher prices.”
Cutting real term benefits would be the “wrong decision”,the Adam Smith Institute has told Liz Truss.
Emily Fielder, head of communications at the ASI, told the Telegraph: “Lower-income households bear the brunt of rising prices and cannot be expected to take further financial penalties during a cost of living crisis.
“Forty per cent of those on Universal Credit are already working, whilst those who are not tend to be disabled or have caring responsibilities.
“Making work pay is vital to stimulate growth and employment, but the Government should not be looking to make blanket cuts for those who will be struggling the most this winter.”
.
