Prime Minister must prioritise increasing benefits with inflation rates, authorities say

Since beginning his premiership this week, Rishi Sunak has been put under immediate pressure to honour his pledge of increasing benefits in line with inflation.

Inflation rates currently stand at 10.1%, the worst they have been in decades, and are currently forcing families across the UK to decide between heating their homes or eating.

Analysis by the Resolution Foundation, an independent think tank, discovered a working couple on universal credit with two children would be left with £752 a year after paying their bills.

With families in distress, charities in England are urging the new Prime Minister to reconsider Liz Truss’ plan of raising benefits in line with people’s earnings rather than inflation rates.

Previously Truss pledged to increase benefits by 5.5%, which isn’t enough to cover the current cost-of-living.

However, in May 2022, while serving as Chancellor under Boris Johnson’s government, Rishi Sunak promised benefits would increase at the same rate as inflation.  

Sunak told MPs in May: ‘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.’

However, Mr Sunak has warned in his first speech since being the Prime Minister that the government is facing ‘tough decisions on both spending and tax’, causing those on benefits to worry.

Following Mr Sunak’s rise into power and his decision to keep Jeremy Hunt as his Chancellor of the Exchequer, independent social change organisation, the Joseph Rowntree Foundation have said their first priority must be providing stability to families on low incomes.

The organisation said: ‘Rishi Sunak personally pledged to go ahead with the usual uprating of benefits in line with inflation, and Chancellor Jeremy Hunt promised last week that he would take action to protect the most vulnerable and to act with compassion.

‘Previous decisions not to go ahead with the normal uprating of benefits, cutting the value of support, mean that current rates are leaving households unable to afford the bare essentials.

‘This inadequate safety net has caused rising debt; foodbank use and homelessness even before this crisis. Even if benefits are uprated in line with inflation, the usual bare minimum the government can do, rates of support will still be in the lowest levels we’ve seen in decades. 

The Chancellor was set to deliver the governments ‘fiscal plan’ on October 31, which will outline how authorities plan to tackle the economic crisis, but this has now been postponed until November 17.

Photo by Ibrahim Rifath