The government has confirmed when a decision will be made on whether or not to raise benefits in line with inflation or earnings.
Work and pensions minister Victoria Prentis said the decision will be announced in November. She said Work and Pensions Secretary Chloe Smith will consider the latest figures, including average wage figures this week and inflation data next week, before making her decision.
Ms Prentis told Sky News: “She can’t do anything until those figures have come and she will then consider how to, if at all, uprate benefits and what figure to choose. She has a very wide discretion to do that. We make a decision and we communicate it usually by the end of November.
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“It’s obviously a really worrying time for people on benefits because they know that inflation is rising. And they want us to make this decision as soon as we possibly can so that they have the security of knowing how their benefits will be next year.”
In a possible hint of her view on the matter, which has caused tensions in the Conservative Party, the North Oxfordshire MP added: “It’s really important that we make sure that we target the government resources at the most vulnerable.”
Meanwhile Tory former chancellor Sajid Javid has said benefits “must” be raised in line with inflation rather than earnings, and urged Kwasi Kwarteng to publish economic forecasts as soon as possible. He told BBC Radio 4’s Today programme: “People are going through incredibly challenging times. We can all see that in our community. So, I personally believe that benefits must stay in line with inflation.
“I hope when – I think the Government is reviewing this decision, there’s no decision – but I hope that decision is a clear one to upgrade with inflation.” Asked whether the Chancellor can afford to wait until November 23 to release data from the independent Office for Budget Responsibility, Mr Javid said: “I would definitely encourage him to publish it as soon as he can. I think the sooner the better, as far as the markets are concerned.”
Baroness Philippa Stroud, Conservative peer and chief executive of the Legatum Institute, warned the Government that benefit payments must go up in line with inflation rather than earnings as “you don’t build growth on the back of the poor”. Speaking on BBC Radio 4’s Today programme, Baroness Stroud said: “When we came out of Covid, the £20 uplift (was) removed from this group of people, then there was an opportunity to uprate in line with inflation again, and it was uprated in line at 3%. So, already you’ve got welfare at historic lows at this moment in time.
“The public knows that. They get this sense that there’s something not right in the welfare state at this moment in time. So, we would say stop this argument and make sure that we uprate in line with inflation.”
Last week, members of the Cabinet publicly urged Liz Truss to raise benefits in line with inflation and questioned her climbdown on the 45% rate for earnings over £150,000. Home Secretary Suella Braverman said she was “disappointed” by the Chancellor and Prime Minister's mid-conference tax U-turn, and accused Tory rebels like Michael Gove of staging a “coup”.
Commons Leader Penny Mordaunt, another former leadership contender, said it “makes sense” to increase benefits in line with soaring inflation rather than deliver a real-terms cut. Ms Truss is instead considering a raise in line with the far lower figure of earnings, but said she would not be sacking Ms Mordaunt for publicly stating her firm stance.
Inflation hit a 40-year high at 10.1 percent in the 12 months to July 2022, according to the Office for National Statistics.
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