The Work and Pensions Committee has pressed Chancellor Kwasi Kwarteng to honour the commitment made by the former Chancellor, Rishi Sunak, to uprate benefits in April 2023 in line with the September 2022 Consumer Price Index (CPI) rate.
When questioned in Parliament, the Chancellor stated that the UK Government “will make announcements about that in due course,” sparking doubts about the likelihood of uprating. The Secretary of State is required by law to review certain benefit rates annually to ensure they retain their value.
Prime Minister, Liz Truss, is highly anticipated to comment on the uprating in her speech during the final day of the Conservative Party conference today. She has previously refused to rule out real-term cuts in welfare payments despite saying State Pension would rise in line with inflation, but declined to commit to the annual uprating of benefits in line with inflation.
The Work and Pensions Committee highlighted how the gap between the September 2021 CPI rate used to increase benefits, and the actual rate of inflation in April 2022, means that people who claim benefits including Universal Credit are already seeing a real-terms fall in the value of their income during 2022.
The impact of continuing high inflation and rapidly rising prices will increase the gap between the rate at which benefits are paid and the cost of living.
The letter to Kwasi Kwarteng is part of the Committee’s continuing work looking into the impact of rising food and energy costs on people on the lowest incomes.
The Rt Hon Stephen Timms MP, Chair of the Work and Pensions Committee, said: “Prices are continuing to rise at unprecedented rates and inflation is unlikely to abate soon.
“People on the lowest incomes are increasingly struggling to get by on the essentials and, because of the jump in inflation between September 2021 and April 2022, benefits claimants’ incomes have fallen sharply in real terms this year. The former Chancellor assured Parliament there would be a ‘catch up’ next April.”
He warned: “The Chancellor must honour his predecessor’s pledge to uprate benefits in the usual manner, in line with inflation. Without it, countless families risk being pushed further into crushing poverty as they are forced to stretch the same money over higher prices.”
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