Liz Truss must increase benefits in line with inflation rather than earnings, the former chancellor Sajid Javid has said, as the prime minister faces increasing Conservative pressure to relent over the issue.
Victoria Prentis, the work and pensions minister, insisted no decision had been made, while seeming to hint she would prefer the more generous settlement.
Asked about how to help people on benefits while inflation is close to 10%, almost double that of the growth in earnings, Prentis told Sky News on Monday: “It’s really important that we make sure that we target the government resources at the most vulnerable.”
Javid’s intervention came a day before the Commons resumes, with the prime minister reportedly ready to launch a charm offensive to improve relations with her MPs following a notably fractious first few weeks in office and a turbulent Conservative conference.
Truss is expected to potentially bow to pressure for the inflation-based increase in benefits, with new research saying the real-terms reduction from an earnings-based rise could push an extra 450,000 people into poverty.
Interviewed by BBC Radio 4’s Today programme on Monday, primarily to talk about mental health and the suicide in 2018 of his older brother, Tariq, Javid was asked whether he believed benefits should rise according to the inflation rate.
“People are going through incredibly challenging times,” Javid said. “We can all see that in our communities. So I personally believe that benefits must stay in line with inflation. The government is reviewing its decision, but I hope that decision is a clear one, so the upgrade is with inflation.”
Javid, who was the chancellor as well as the health secretary at different times under Boris Johnson, having previously been the home secretary under Theresa May, also strongly indicated he believed Kwasi Kwarteng, Truss’s chancellor, should speed up the release of forecasts from the Office for Budget Responsibility about the impact of the recent tax-cutting mini-budget, scheduled for 23 November.
“It’s right that the chancellor has said that there’s going to be this OBR report,” Javid said. “It’s right that he’s committed for this report to show debt falling as a proportion of GDP. It’s important we maintain fiscal rules, as he said.
“But I would definitely encourage him to publish it as soon as he can. The sooner the better, as far as the markets are concerned.”
While saying he backed Truss’s overall plan to grow the economy, Javid said he hoped “lessons have been learned over the past few weeks” in which the government made a series of U-turns, such as the decision to reverse a plan to abolish the top 45p rate of tax.
He said: “We’ve obviously taken some blows. It’s been a very challenging time. But what we have also seen is that the government has listened, Liz Truss has listened. We saw that with the 45p rate.”
Speaking earlier on Sky, Prentis said the decision on benefits would happen next month, Chloe Smith, the work and pensions secretary, Chloe Smith, needing to consider next week’s data on inflation and earnings.
“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,” Prentis said. “She has a very wide discretion to do that. We make a decision and we communicate it, usually by the end of November.
“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 another apparent sign of Truss seeking to reach out to more parts of the Tory party, it was announced on Sunday night that Greg Hands, a strong supporter of her rival in the party leadership race, Rishi Sunak, has returned to his old job as an international trade minister.
Hands was among a mass of Sunak backers to be sacked from government when Truss took over, appointing ministers almost entirely from her loyalists. But he has replaced Conor Burns, who was dismissed last week following allegations of inappropriate behaviour at the party conference.
The move was welcomed by Grant Shapps, another former minister who has emerged as a leading Tory voice opposing Truss. He said in a tweet that it was a “great appointment”.
