Rishi Sunak has been announced as the next prime minister of the UK, leaving Brits eager to hear how he plans to grow the economy, stabilise the markets and support vulnerable families struggling amid the cost of living crisis. Another matter high on the former chancellor's agenda is how to unite a divided Tory party.
One of the items in the new PM's intray - and one of the issues which the party can't seem to agree on - is what to do about uprating Universal Credit and other benefits. During her short stint in Downing Street, Liz Truss refused to rule out uprating benefits payments in line with earnings rather than inflation, despite warnings that doing so would result in a real-terms cut of up to £1,000 a year for some of Britain's poorest families.
Back when Mr Sunak was serving as chancellor under the leadership of former prime minister Boris Johnson, he committed to uprate welfare payments in line with September’s Consumer Prices Index, which has reached 10.1 per cent according to figures published on by the Office for National Statistics (ONS) earlier this month.
READ MORE: What Rishi Sunak could do about the cost of living, the NHS, immigration, energy and Brexit
Mr Sunak announced a series of financial support measures for those worst off in a statement to MPs in the House of Commons in May, including cost of living payments for those on means-tested benefits, extra support for people on disability benefits and the £400 discount on energy bills for all households over the winter period. In the same statement, the then-chancellor confirmed that benefits would rise in line with inflation next April, and pledged to keep the triple lock on pensions.
He told MPs: "I can reassure the House that next year, subject to the Secretary of State’s review, benefits will be uprated by this September’s CPI, which, on current forecasts, is likely to be significantly higher than the forecast inflation rate for next year. Similarly, the triple lock will apply for the state pension."
So with Mr Sunak now taking on the top job, he will have to decide whether he will be sticking to his previous commitment.
The Child Poverty Action Group has already urged Mr Sunak to stick to his original pledge by increasing benefits in line with inflation. Chief executive Alison Garnham said in a statement: “If integrity is key, the new PM must keep his word and uprate benefits with inflation from April.
“If the pledge isn’t honoured, we won’t be the country the PM wants where the next generation has more than the last, we’ll be a country of soaring child poverty.
“This must be a reset moment for the four million children already in poverty and others who are perilously close to it. Lifting those kids from poverty by ensuring families have realistic social security support must be a top priority for the new government.”
Jeremy Hunt is set to stay on as chancellor following the announcement that Mr Sunak will be taking up residence in Number 10. Former chancellor Kwasi Kwarteng previously said a decision on updating benefits would be announced during his medium-term fiscal plan on October 31, but the government has been unable to confirm that Mr Hunt plans to stick to the arrangement.
Mr Sunak has made no reference to his economic policies since being declared the next Tory leader. In a brief speech at the Conservative party headquarters, he said the country faces a “profound economic challenge”. The incoming PM promised to serve with “integrity and humility”, adding that his priority was to "bring our party and our country together". But aside from that, the nation is yet to hear what he plans to do as PM.
During the previous leadership contest, which took place over summer, Mr Sunak positioned himself as the candidate prepared to tell hard truths about the state of public finances. He argued that Ms Truss' unfunded tax cuts at a time of spiralling inflation were dangerous, predicting they would lead to surging mortgage rates - which they did.
Mr Sunak vowed that he would “especially” support the most vulnerable in society amid the cost of living crisis, warning that “millions of people are at risk of a very tough time”. During one hustings, he told party members: “If we don’t directly help those vulnerable groups, those on the lowest incomes, those pensioners, then it will be a moral failure of the Conservative government and I don’t think the British people will forgive us for that."
He also vowed to be “much tougher” on the welfare system, arguing that one of the main problems facing firms is “getting access to workers and getting people to actually work”. He said: “I strongly believe that part of the answer to this problem is being much tougher on our welfare system to get people off benefits and into work. If there are hours to do, if there is a job going, people should have to take the job as opposed to just being able to stay on benefits, and that is the change that I want to bring.”
READ NEXT:
- "We are doomed": What Mancs are saying about Rishi Sunak becoming the new Prime Minister
- Awkward moment Rishi Sunak 'snubs' Matt Hancock as he arrives at Conservative HQ
- Rishi Sunak's 86-second speech in full as incoming Prime Minister makes first address to the nation
- How markets have reacted to Rishi Sunak being named next Prime Minister
- BBC News presenter Martine Croxall pulled off air amid Boris Johnson bias claims
