Kwasi Kwarteng has signalled that the poorest people in the Britain will have to bear the brunt of his disastrous handling of the economy.
In his first public statement since sending the pound plummeting the train wreck chancellor said it was too soon to say if benefits will rise with inflation next year, as promised.
In a move that could herald a new era of austerity the Treasury told Whitehall departments on Wednesday that “efficiency savings” would have to be made to fill the hole in the public finances.
Having announced sweeping tax cuts including for top rate payers in the first 20 days of his job, Kwarteng refused to say if the poorest would see their benefits rise with inflation, which is running at 10 per cent.
The channcellor said: “We are talking about helping people in the round. It’s premature of me to come to a decision about that”.
The Resolution Foundation estimated think tank estimated that £11 billion could be lost to claimants if benefits are uprated by earnings instead of by inflation in the next year amid warnings that would lead to destitution for many.
A couple with two chilidren on benefits woul lose £1061 and a single parent with one child on benefits would lose £607 a year the Resolution Fondation calculated.
In tv comment on Thurday Kwarteng sidestepped questions on tyhe mini budget disaster but insisted that his measures were needed to ensure growth.
He insisted that the Government is “sticking to the growth plan” and that it is “going to help people with energy bills”.
Chris Philp, Kwarteng’s deputy as chief secretary to the Treasury, confirmed this morning that cabinet ministers are being told that they must manage within existing budgets, even though inflation means they may be going down in real terms.
Concern was expressed by trade unions representing public sector workers in response to reports that departments are being asked to draw up plans for cuts as a result of the crisis sparked by the mini-budget.
Civil service departments were already delivering an average of five per cent efficiency savings agreed as part of a review last year.
Dave Penman, the general secretary of the FDA union, which represents senior civil servants said it now appeared the government was asking for those plans to be ripped up “in a state of panic”.
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