Rishi Sunak refused to rule out cutting benefit payments to fund a tax cut before the next election, despite experts warning the move would be “morally bankrupt and economically illiterate”.
The prime minister declined to “speculate” about what will be in chancellor Jeremy Hunt’s Budget in November when asked if he could guarantee benefits will rise with inflation.
It came amid a Tory row over whether Mr Hunt will hand benefit claimants a real-terms pay cut in order to find money for pre-election tax cuts.
Ministers normally increase payments in line with the previous September’s inflation figures – which this year could be 7 per cent.
But the government did not deny that fugure could be squeezed, in anticipation of a fall in the headline rate later this year.
The chancellor is facing a difficult autumn statement in November, with little room for manoeuvre financially.
At the same time, however, he is coming under intense pressure from Tory MPs to offer a pre-election tax cut to voters in next spring’s Budget.
Liz Truss’s allies have accused the chancellor of stealing one of her key idea’s to “kick start” economic growth when she was briefly prime minister.
They also claimed that had he adopted the idea in last year’s autumn statement, the exchequer’s coffers would be more than £4bn richer by now.
Speaking from the G20 summit in India, Mr Sunak said there is a legal process which is worked through “every year to do benefits uprating and a whole host of other things”.
“And those decisions are announced at the autumn statement, that’s entirely normal,” he said.
As the prime minister sought to “reassure” those struggling with the cost of living, he pointed to the extra support already put in place to help with energy payments and other bills.
“So people should be reassured that that extra support is there for the most vulnerable in our society at a time which I know is difficult and that’s why we have to bring inflation down,” he said.
“That’s why my first in my five priorities is to halve inflation. That is the best way to help everyone with the cost of living.”
But Helen Barnard, director of policy, research and impact at anti-poverty charity the Trussell Trust, said the idea ministers are considering cutting benefits is “horrifying”.
She told The Independent: “Already six in 10 people on universal credit can’t afford to eat properly, and with winter coming this will strike fear into the hearts of many.
“Millions are trapped in appalling hardship, with debts piling up and their physical and mental well-being deteriorating.”
Ms Barnard highlighted warnings from health leaders that poverty is fuelling a crisis as winter approaches and said a benefit cut would force millions of people deeper into destitution.
She said any cut would be “morally bankrupt and economically illiterate”.
Mr Hunt and Mr Sunak have both repeatedly said that they want to cut taxes, when the economic picture allows.
The economy is still suffering from the after effects of the pandemic, the cost of living crisis and Ms Truss’s disastrous mini-Budget, which led her to be ousted from office by her fellow Tory MPs.
Ministers could try to use the widely predicted fall in inflation to justify the decision to squeeze benefits.
A government spokesperson said: “In order to protect the most vulnerable from the impact of high inflation, the government increased benefits by over 10 per cent this year.
“As is the usual process, the secretary of state will conduct his statutory annual review of benefits and state pensions in the autumn, using the most recent data available.”
